FRANCE Law and Practice Contributed by: Anne-Sophie Noury, Saam Golshani and Alicia Bali, White & Case
• if the plan is not approved through the class-based consultation procedure (whether by regular approv - al by the classes of affected parties or by a cross- class cram-down), the approval of the plan may occur through the individual consultation rules. Treatment of New Money Claims New money and post-money privileges are granted to creditors who provide new financing to a company undergoing certain restructuring or insolvency proce - dures, such as safeguard or conciliation proceedings. A debt claim benefitting from a new money privilege may be given different treatment from old money in any subsequent court-administered proceedings. The new investors will enjoy a priority of payment over all pre-commencement and post-commencement claims (subject to certain exceptions, including with respect to certain post-commencement employment claims and procedural costs) in the event of subse - quent court-administered proceedings. Such claims benefitting from this new money privilege may also not be rescheduled or written off by a safeguard or reor - ganisation plan without their holders’ consent, even through a cram-down or a cross-class cram-down (in the event that classes of affected parties are formed). Arbitral Court and Bankruptcy Court Jurisdiction According to consistent case law, the bankruptcy court has exclusive jurisdiction over all disputes aris - ing from statutory restructuring, rehabilitation and reorganisation proceedings (such as the opening of the proceedings, the annulment of transactions entered into during the hardening period ( nullités de la période suspecte ) or sanctions imposed on man - agers). However, disputes not directly connected to the stat - utory restructuring, rehabilitation and reorganisation proceedings may still be referred to arbitration, pro - vided that an arbitration clause exists or that the par - ties mutually agree to submit the matter to arbitration. Ordinary jurisdiction applies when the dispute arises from facts or contracts predating the proceedings and would have occurred in the same manner irrespective of them. This is particularly the case for disputes concerning the amount of a claim declared in a proof of claim
( déclaration de créance ), where the underlying obliga - tion arises from a contract containing an arbitration clause. In such circumstances, the insolvency judge must declare a lack of jurisdiction, and the dispute shall be referred to the competent arbitral tribunal. In practice, however, the use of arbitration in the con - text of statutory restructuring, rehabilitation and reor - ganisation proceedings remains exceedingly rare. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure In safeguard and judicial reorganisation proceedings, after the draft plan has been adopted by the class(es), the court must ensure that certain conditions are met, and notably that the interests of all parties affected are sufficiently protected. In any case, the court may refuse to adopt the plan if it does not provide a suf - ficient perspective to avoid the debtor’s insolvency or to ensure the viability of the business. The judgment adopting the plan makes its provisions enforceable against all parties. From the date of the judgment opening court-adminis - tered proceedings, the debtor is prohibited from pay - ing debts incurred prior to the opening of the proceed - ings subject to specified exceptions, which essentially cover: • the set-off of reciprocal receivables arising prior to the opening judgment, provided that debts were certain, due and payable ( créances certaines, liq- uides et exigibles ) before the opening judgment; • the set-off of related ( connexes ) debts (ie, when they arise from the same account, from the same contract or from different agreements that all belong to a global contractual framework); • payments authorised by the supervisory judge ( juge commissaire ) to recover assets, whether they are pledged or retained by a creditor based on a retention right, or constitute collateral in a security trust estate ( patrimoine fiduciaire ) required for the continued operation of the business; and 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
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