Franklin advises Lise Charmel on its reorganization plan
On February 27, 2020, the Lise Charmel group sought court protection from its creditors by filing for reorganization in the Commercial Court of Lyon. On September 30, 2021, after 19 months of proceedings, the court confirmed the reorganization plans filed by the group, thus rescuing a flagship of France’s luxury industry and saving more than 800 jobs around the world, including 200 in France.
The Lise Charmel group designs, manufactures and sells high-end lingerie, generating revenue of over €500 million, 50% of which is from exports.
Lise Charmel’s troubles began in 2018, when a general slump in the lingerie market, the “yellow vest” crisis and substantial bank debt combined to prompt the group’s Holding company, Lise Charmel Industrie, and 7 of its French subsidiaries to apply for preventive measures to stave off insolvency.
This out-of-court process was brought to a halt in 2019, when all group companies were hit by a ransomware attack that crippled their IT systems and caused production to shut down for over three weeks. These extraordinary circumstances pushed the Lise Charmel group to seek the protection of the Commercial Court of Lyon, which decided to place these 8 companies in reorganization on February 27, 2020.
From then on, the Management, in collaboration with its legal advisers and court-appointed officials, strived to reorganize the group in order to boost revenue and cut costs: strategic rebranding and marketing, supply chain digitization, workforce reduction, etc.
The reorganization helped save most of its staff, including 200 jobs in France and 602 overseas.
In the reorganization plans confirmed by the Commercial Court of Lyon, the group also laid out its intention to reorganize its corporate structure by merging several wholly-owned subsidiaries into their holding company (“dissolution-confusion”), in an effort to further reduce costs.
Finally, and most importantly, the group and its advisors, with the assistance and unwavering support of its court-appointed trustees and creditors’ representatives, negotiated a massive reduction of its debt load with each company’s creditors, which was the cornerstone of the case and a necessary condition to the continued operation of the group.
The court’s confirmation of the 8 reorganization plans filed by Lise Charmel group companies marks a victory for the French luxury industry.
With the support of its court-appointed trustees and creditors’ representatives, the unwavering commitment of the bankruptcy judges, the approval of employee representatives and the State counsel’s office, as well as massive backing from its creditors, the Lise Charmel group has emerged from reorganization stronger.
The Lise Charmel group was advised by Franklin (partner Numa Rengot, associates Fanny Attal and Pierre Dupuys, partner Yann Colin, associate Victor Cracan , partner Myriam de Gaudusson, associate Amélie Nisio) and Moreau Avocat (partner Luc Moreau), including on devising the strategy for drawing up and negotiating its reorganization plan, and by Grant Thornton (partner and Head of Restructuring France Clotilde Delemazure, and Head of Restructuring Romain Lochon) on financial aspects.
Godet et Associés (partners Dominique Godet and Magali Ostrolenk) advised the Lise Charmel group on corporate issues.
Kalliopé Avocat (partner Karen Leclerc) advised the Lise Charmel group on insurance law issues (cyber attack).
AJ Meynet & Associés (Robert-Louis Meynet, Typhaine Meynet, Arthur Boucaud, Pierre Beurton and Malory Chapon) and BCM (Eric Bauland and Anissa Nehache) assisted in their capacity as court-appointed trustees.
Alliance MJ (Marie-Dubois) and MJ Synergie-Mandataires judiciaires (Bruno Walczak and Michaël Elancry) served as court-appointed creditors’ representatives.
Seigle Barrié & Associés (Aurélien Barrié) advised the court-appointed officials.
De Pardieu Brocas Maffei (Philippe Dubois) advised the court-appointed auditor.
RE-AGIR (Pascal Layet) advised the group’s labor-management committee.