It is important to have a correct diagnosis of the situation. We often work with an internal team and external auditors, including financial auditors, to get a good appraisal of the magnitude/origins/reasons behind the distress situation in order to address possible remediation. The environment is moving constantly, so even when we have made our determinations, we need to continually adjust. This complexity of the environment is one of the key challenges because we do need to work with experts externally and internally for our clients to have a clear audit.
There are also specifications in France in relation to labour laws and the lack of flexibility of our labour legal environment. For businesses that face huge loss of income, this can make it more difficult to re-adjust quickly, and so this requires more anticipation, which may or may not happen. The less anticipation we have, the more hurdles we face, and the fewer options we have available. Another complication that we have in France is that the market is not as mature as other markets, such as the United States and England, in terms of financial institutions and financing of the market. There are a lot of businesses that lack capital investment, and financial support has not been adapted to their needs. Typically, they will use short-term financing to support medium-term needs, which is a separate set of issues that we see in France. There is this lack of sophistication of the market, and a lack of appetite of some investors, because each file requires a lot of time, meaning that the size of the ticket may be smaller.
Another difficulty is that we have specificity in France with the intervention of public law. There are a lot of businesses that are dependent on, or intertwined, with public law or public players, which is a set of laws and administrative code within the various industries we are called into. For example, players that are suppliers of public entities or semi-public entities – such as redwood, energy and nuclear companies – may face a hurdle in that context.
One of the last issues we face is the problem of instability of our tax and legal environment.