FRANCE Law and Practice Contributed by: Yves Hénaff d’Estrées, HENAFF D’ESTREES
ting up a safeguard plan of a maximum of ten years which provides for financial and economic conditions and obligations (for example, rescheduling of debts, transfer of assets) for the continuation of the business activity of the debtor. In the procedures of judicial reorganisation, judicial liquidation and safeguard, the court judgment open - ing the procedure has several main effects such as, in particular, prohibition of any payment for pre-judg - ment debts and suspension of individual proceedings. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings European Regulation No 2015/848 of 20 May 2015 relating to insolvency proceedings provides for uni - form rules of competent jurisdiction, organisation, judicial co-operation for administering the insolvency proceedings, and recognition of insolvency judgments among the European member states. Insolvency and bankruptcy judgments by foreign courts located in states not members of the European Union may be enforced in France in accordance with the ordinary procedure of exequatur. The French court will check the indirect competent jurisdiction of the foreign court, the conformity of the foreign procedure with the international public order (essentially compliance with due process), and the absence of fraud. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney Irrevocable deregistration and export request authori - sation (IDERA) is not recognised in France because France is not a party to the Cape Town Convention. 2.9.5 Other Effects of a Lessee’s Insolvency When the lessee of an aircraft, who is in possession of that aircraft, is put into liquidation or administration or a similar process, the following generally applies: • the bankruptcy trustee may elect not to continue the performance of the lease; • the lessor may be prevented or delayed from repossessing the aircraft on termination of the
lease if the lease was not terminated before the date of the bankruptcy judgment; • the aircraft will not be deemed to be part of the les - see’s property; and • the liquidator/administrator may not impose the rights of any other creditors in priority to those of the lessor, if the return of the aircraft has been duly requested by the lessor. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent The main risk for a lender if a borrower, guarantor or entity providing security becomes insolvent is that the debts which were outstanding before the bankruptcy judgment will be left unpaid. However, any new loan made to a borrower in bankruptcy that is deemed necessary for the continuation of its activities after the date of the bankruptcy judgment will benefit from preferential rights of payment. 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings An observation period may be ordered by the bank - ruptcy court for six months, renewable for another six-month period, during which no payment or judi - cial action for payment, or for termination for default of payment, may be made for debts due before the bankruptcy judgment or those due after the judgment, which are not necessary to continue the debtor’s activity. All procedures of execution on the debtor’s assets are also either suspended or prohibited. 2.9.8 Liquidation of Domestic Lessees In France, an insolvent lessee can be liquidated or placed in administration or receivership either at its own request or at the request of a creditor or the pub - lic prosecutor. 2.9.9 Ipso Facto Defaults In repossessing a French registered aircraft after the bankruptcy judgment of a lessee, the following applies: • if the lease was registered by the lessor with the register of security rights in movables ( registre des sûiretés mobilières ) before the judgment, the lessor is informed by the trustee that it has to declare its claim, and the lessor may request that the trustee
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