France
Commercial Code, Book VI, Insolvency Act
Updated 28 April 2012
Updated 01 January 2005
Commercial Code, Book VI, Insolvency Regulations
Updated 28 April 2012
Please note that the English version of the Insolvency Regulations is not available.
Updates
Act no. 2012-387 of 22 March 2012
on Simplification of Law
The new procedure called “accelerated safeguard procedure” (sauvegarde financière accélérée – SFA) came into force on 1 March 2011 but has already been subject to modification by the lawmaker. (SFA was initially introduced by law no. 2010-1249 on Banking and Financial Regulation of 22 October 2010.)
The decree no. 2011- 236 of 3 March 2011 was enacted to specify the new procedure of the SFA. However, a problem had been identified in the SFA even before it had entered into force. The lawmaker had wanted to create a new tool reducing conflicts of interests between banks and financial holding companies in the context of secondary LBOs. However, SFA was limited to companies that have more than 150 employees or a turnover of more than €20 million. Financial holding companies were therefore excluded from the scope of SFA as they seldom reach these thresholds.
The decree was supposed to broaden the scope of SFA, but, given its importance, the provision was incorporated into the Law on Simplification and Improvement of 13 April 2011.
However, this provision was declared, inter alia, unconstitutional for procedural reasons on 12 May 2011.
So the legislature has now reintroduced this provision in law no. 2012-387 of 22 March 2012 on Simplification of Law.
Accordingly, the SFA procedure is finally applicable to financial holding companies.
Insolvency Act (Amendment) concerning the “accelerated safeguard procedure” has been published on 23 March 2012 (JORF n°0071 du 23 mars 2012 page 5226).
The text is available in French at:
Act no. 2012-346 of 12 March 2012 relating to protective measures applicable to “sauvegarde, redressement judiciaire et liquidation judiciaire” proceedings
The French legislature issued a new law no. 2012-346 on 12 March 2012 on protective measures applicable to safeguard, reorganisation and liquidation procedures.
Before the passing of this law, the president of the court could only order protective measures such as seizure or sale of a debtor’s assets if a liquidation was extended to cover other assets intermingled with those of the debtor or if the debtor was culpable.
This new law now allows the president of the court to order protective measures against a debtor’s assets based on the extension of a safeguard, reorganization or liquidation procedure due to confusion of assets.
The purpose of the new law is to limit the diversion of the debtor’s assets in all insolvency procedures.
Insolvency Act (Amendment) concerning the protective measures has been published on 13 March 2012 (JORF n°0062 du 13 mars 2012 page 4497) and is immediately applicable.
The text is available in French at:
A commentary is published in the 2012 Spring edition of Eurofenix by Catherine Ottaway, Partner, Hoche Société d'Avocats (Paris).