FRANCE Law and Practice Contributed by: Anne-Sophie Noury, Saam Golshani and Alicia Bali, White & Case
White & Case 19 Place Vendôme 75001 Paris France
Tel: +33 1 55 04 15 15 Fax: +33 1 55 04 15 16 Email: anne-sophie.noury@whitecase.com Web: www.whitecase.com
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework The major laws applicable to French restructuring and insolvency that have been passed in the last ten years are as follows. • Law No 2005-845 dated 26 July 2005, together with its enforcement Decree No 2005-1677 dated 28 December 2005, has deeply modernised restructuring and insolvency law by giving priority to the negotiation and prevention of financial dif - ficulties. The safeguard proceeding was one of the major innovations introduced by this law. • Ordinance No 2008-1345 dated 18 December 2008 had the main objective of making safeguard pro - ceedings more accessible and attractive by relax - ing the conditions for their initiation and improving a company’s reorganisation conditions. • Law No 2010-1249 dated 22 October 2010 intro - duced the accelerated financial proceeding. • Ordinance No 2014-326 dated 12 March 2014, and complementary Order No 2014-1088 dated 26 September 2014, introduced significant changes to restructuring and insolvency proceedings (eg, pre- pack proceedings). • Law No 2015-990 dated 6 August 2015 introduced the shareholder squeeze-out, intended to promote economic growth, activity and equal opportunity. This law has also created specialised commercial courts with exclusive jurisdiction for large compa - nies. • Law No 2016-1547 dated 18 November 2016 ( Loi pour la modernisation de la justice du 21ème
siècle ) brought, among other things, modifications with respect to changes to the by-laws and the share capital of a debtor under a restructuring plan, and clarified certain existing doubts with respect to the reconstitution of equity and the rights of new money creditors. • Law No 2021-1193 dated 9 December 2016 amended the regime governing directors’ liability in insolvency scenarios in order to encourage the recovery of honest directors of failed businesses. • Law No 2019-486 dated 22 May 2019 ( Loi Pacte ) introduced additional amendments and empow - ered the government to substantially amend the French insolvency law in order to transpose Euro - pean Directive No 2019/1023 dated 20 June 2019, which aimed to harmonise European legislation regarding preventative restructuring proceedings and debtors’ recovery. • Ordinance No 2020-341 dated 27 March 2020, Ordinance No 2020-596 dated 20 May 2020 (in force from 22 May 2020), Ordinance No 2020-1443 dated 25 November 2020 (in force from 27 Novem - ber 2020) and Law No 2020-1525 dated 7 Decem - ber 2020 (in force from 9 December 2020) tempo - rarily amended French restructuring and insolvency laws to deal with the COVID-19 health crisis. Some measures that were initially adopted by these ordi - nances were due to expire on 31 December 2020, but Article 124 of Law No 2020-1525 extended them until 31 December 2021. • EU Directive No 2019/1023 of 20 June 2019 on preventative restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive
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