FRANCE Law and Practice Contributed by: Anne-Sophie Noury, Saam Golshani and Alicia Bali, White & Case
on restructuring and insolvency) (the “EU Restruc - turing Directive”). • Ordinance No 2021-1193 dated 15 September 2021 (the “2021 Ordinance”), effective from 1 Octo - ber 2021 in respect (with limited exceptions) of preventative and insolvency proceedings opened as of such date only, and Decree No 2021-1218 of 23 September 2021 for the implementation of the 2021 Ordinance (the “2021 Decree”) transposing the EU Directive. 1.2 Types of Insolvency Under French law, there are two categories of pro - ceedings: • amicable or out-of-court proceedings; and • insolvency or court-administered proceedings. The first category includes mandat ad hoc and con - ciliation proceedings. The second category includes safeguard, accelerated safeguard, judicial reorganisa - tion and judicial liquidation proceedings, although the debtor under safeguard proceedings is not cash flow insolvent ( état de cessation des paiement s). French law distinguished the accelerated financial safeguard proceeding and the accelerating proceed - ings (the previous regime). Since the 2021 Ordinance, both proceedings have been merged into one single procedure: the accelerated safeguard procedure. 1.3 Statutory Officers In out-of-court proceedings, the president of the court appoints a mandataire ad hoc or a conciliator, whose mission is laid down in the order. In safeguard and judicial reorganisation proceedings, the court appoints a supervisory judge, a judicial administrator and a creditors’ representative. In liquidation proceedings, the court appoints a liq - uidator and a judicial administrator if the company continues to operate its business, in order to organise the sale of the business as a whole through an open bid process. In out-of-court proceedings, the mandataire ad hoc or conciliator does not have any management respon -
sibilities; their mission depends on the petition of the debtor and the order of the president of the court, and mainly consists of assisting the debtor in negotiating an agreement with all or part of its creditors and/or other stakeholders. Under safeguard proceedings, the judicial adminis - trator generally supervises the debtor, who stays in possession and prepares the safeguard plan ( mis- sion de surveillance ). The court may decide that the judicial administrator assists the debtor to manage its business, which means that all the payments should be controlled by the judicial administrator ( mission d’assistance ). This latter is by experience not the base case and tends to be rare. Under reorganisation proceedings, the judicial administrator generally assists the debtor ( mission d’assistance ). The court may decide in extreme situa - tions that the judicial administrator should substitute the legal representative and administer the company ( mission de gestion ). In any case, acts that are not considered to be within the ordinary course of business are subject to the prior authorisation of the supervisory judge. In safeguard and judicial reorganisation proceedings, the creditors’ representative is mandatorily appointed to represent the creditors and protect their collective interest, and also to receive and verify all the proofs of claims from creditors. The liquidator is mandatorily appointed to carry out transactions regarding the disposal of the business of the debtor (as the management is usually divested of all its rights) and to distribute the proceeds among the creditors according to the ranking set forth by the Commercial Code. Out-of-court proceedings are carried out by a manda- taire ad hoc or conciliator, whose name may be sug - gested by the debtor itself, under the supervision of the president of the commercial court. In court-administered proceedings, the court appoints the officers and fixes their mission within the judgment opening insolvency proceedings.
147 CHAMBERS.COM
Powered by FlippingBook