<aside> 💡 What is judicial reorganization and how does it work?

Judicial reorganization is a legal procedure in France that allows a financially troubled company to continue its operations while attempting to restore its economic situation.

</aside>

Here are the main characteristics of this procedure:

• Continuation of operations and the initiation of a six-month observation period: In accordance with Articles L. 631-1 and following of the French Commercial Code, this period leads to a reorganization plan or a transfer plan aimed at restoring the company's financial situation and ensuring its sustainability.
• Suspension of pre-existing debts: All debts incurred before the initiation of the procedure are frozen, including pending sales payouts.
• Reorganization or transfer plan: A plan is developed to reorganize the company, reduce costs, and potentially restructure debts. If complete recovery is not feasible, a transfer plan is considered. This plan involves selling all or part of the company’s assets to repay creditors and attempt to preserve jobs and the continuity of the business.
• Judicial oversight: An administrator and a judicial representative are appointed to oversee the procedure. Their role is to ensure compliance with the conditions of the procedure and to assist in the implementation of the reorganization or transfer plans.

The goal of judicial reorganization is to enable the company to recover financially, avoid liquidation, and preserve as much as possible its operations, employees, and ability to repay creditors.

**Why is Wethenew currently in judicial reorganization?

What specific challenges are being faced?**

Wethenew is going through a difficult period due to several significant challenges. We have been severely impacted by fluctuations in the limited-edition sneaker market, which has experienced an end to hypergrowth and a marked decrease in demand. These changes, combined with the difficulties faced by other major players in the sector, have deeply affected our economic model.

In response to this situation, we have requested to be placed in judicial reorganization. This procedure aims to restore our financial balance and seek potential buyers to ensure the sustainability of our company.

What is Wethenew's current situation after entering judicial reorganization?

The judicial reorganization grants Wethenew a six-month observation period. During this time, our priority is to restore our financial situation while continuing our activities.

We are working closely with the court-appointed administrator to identify all outstanding debts, including those owed to our sellers. This process is essential for us to structure a recovery or sale plan.

Throughout this period, we are continuing our operations: we are still buying and selling products, as well as shipping orders every day. We are doing everything possible to ensure continuity in our services and maintain our operations under the supervision of the judicial administrator.

**How does judicial reorganization differ from judicial liquidation?

Does this mean that Wethenew is bankrupt?**

Judicial reorganization and liquidation are two distinct procedures. Liquidation involves the permanent cessation of the company’s activities, with the sale of its assets to repay creditors, marking the end of the company.