Insolvency 2025

FRANCE Law and Practice Contributed by: Anne-Sophie Noury, Saam Golshani and Alicia Bali, White & Case

Lastly, a conciliation may also be opened to organise the partial or total sale of the business (ie, a pre-pack sale plan), which could be implemented, where appro - priate, in the context of a subsequent safeguard (for partial sale only), judicial reorganisation or liquidation proceedings. As in the pre-packaged safeguard plan, the main interests in using the pre-pack sale frame - work lie in the confidentiality attached to the court- assisted amicable proceedings during the preparation phase and the reduction in the duration of the subse - quent court-administered proceedings. 3.2 Legal Status Out-of-court restructuring agreements are purely con - tractual and solely apply to the parties who participate and agree to the restructuring plan. Such restructur - ing agreements cannot be imposed on creditors who did not participate in the conciliation process or who refused to agree to the terms. When the conciliation agreement is formally approved ( homologué ) by the court, the judge assesses the fair - ness between the creditors involved in the agreement, and more particularly ensures that the agreement does not impair the rights of the non-signatory creditors. 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation Accelerated Safeguard The French accelerated safeguard is a restructuring procedure suited for companies that need to reach a swift agreement with creditors while minimising the disruption to their business operations. To be eligible to access accelerated safeguard proceedings, the debtor must meet the following conditions: • its financial statements must have been certified by an auditor ( commissaire aux comptes ) or drawn up by a chartered certified accountant ( expert- comptable ); • it must be subject to ongoing conciliation proceed - ings;

• it must have prepared a draft safeguard plan ensur - ing the continuation of its business as a going concern that is likely to be supported by enough parties that will be impaired by such plan to render its adoption plausible within an initial two-month period, which may be extended to up to four months upon the request of the debtor and the court-appointed administrator; and • it must not have been insolvent for more than 45 days when it initially applied for the opening of conciliation proceedings. If the debtor does not meet the conditions that require creditors’ classes to be formed, the court must order such constitution in the decision opening the pro - ceedings. The regime applicable to standard safe - guard proceedings is broadly applicable to acceler - ated safeguard proceedings. Safeguard The French safeguard procedure is a preventive restructuring process designed to help companies in financial distress but not yet insolvent. Only the debt - or can initiate this process, and it must demonstrate serious financial challenges without having reached a state of cash flow insolvency. The procedure is availa - ble to a wide range of businesses, including corporate entities and individual entrepreneurs, and is aimed at helping businesses reorganise their debts and opera - tions while under court protection. Judicial Reorganisation When the debtor is insolvent, defined under French law as the inability to pay its debts as they fall due with its immediately available assets, and rescue does not appear to be impossible, the management of the distressed company must request the opening of judicial reorganisation proceedings no later than 45 days after the date on which the company becomes insolvent (provided that conciliation proceedings are not pending). Any unpaid creditor or the public prosecutor may request the court to open judicial reorganisation pro - ceedings should the legal requirements to do so be met. The effects of an involuntary judicial reorganisa - tion are similar to those of voluntary judicial reorgani - sation proceedings.

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