Restructuring & Insolvency Law

The early warning mechanisms provided for in Book VI of the Commercial Code are tools that enable stakeholders – whether close to the director or in direct contact with them – to bring to their attention situations that could compromise the company’s long-term viability.
Designed to address any lack of awareness on the part of the director, the successful implementation of these alert procedures depends on a clear understanding of the procedures themselves, as well as their timely activation.

We assist those entitled to raise the alert to ensure the effective implementation of these alert mechanisms.

Working alongside the director, we support them in finding a favourable outcome to the alert procedure that has been triggered: (i) identifying the difficulties and (ii) implementing solutions before the company ceases payments.

Voluntary arrangement procedures for dealing with corporate difficulties are now essential tools for managing all types of corporate crises. In the discretion of the company director, they enable the director to work towards finding solutions to difficulties which, although sometimes temporary, could lead to insolvency.

Only the director can request the opening of an ad hoc mandate or conciliation proceedings. The company can thus negotiate an amicable agreement with its creditors or stakeholders in a confidential setting. Whilst ad hoc mandate and conciliation proceedings are broadly similar, the latter has the advantage of resulting in an agreement that may be sanctioned by the court.

We assist company directors in applying for the opening of voluntary arrangement proceedings and in negotiating, within the framework of these proceedings, agreements with the company’s key partners. We also assist stakeholders involved in amicable proceedings in structuring the negotiations and securing their interests in the agreements negotiated with the debtor.

It may be advisable for the company to prepare, prior to the commencement of conciliation proceedings and in consultation with its creditors or business partners, the agreement that will be signed and, where appropriate, sanctioned by the court during the conciliation proceedings.

This approach allows the director, over a relatively long period if necessary, to engage in discussions with its main creditors, and subsequently, within the limited timeframe of the conciliation proceedings, to have the agreement ratified under the court’s authority.

We work alongside the debtor and creditors to negotiate and execute the conciliation agreement, but also to file the application for the court sanctioning.

The implementation of  ad hoc mandate or conciliation agreements may require the execution of certain measures (execution of security contracts, the transfer of title, the transfer of assets, or changes to corporate governance) in order to ensure compliance with the commitments made and the success of the conciliation process.

We assist the parties in reaching a conciliation agreement, having it approved by the court, and also in implementing it.

Insolvency proceedings are proceedings initiated by the court on behalf of a debtor when certain legal conditions are met. Their purpose is to reorganise the business (administration and receivership) or to organise the orderly liquidation of its assets (compulsory liquidation).

Administration proceedings are initiated solely at the debtor’s request. The director may apply for the opening of safeguard proceedings when the company is experiencing difficulties that it cannot overcome.

The law requires the director, within 45 days of the company ceasing payments, to apply to the court for the opening of receivership, or judicial liquidation if it is manifestly impossible to restructure the company.

The company director is the applicant for the opening of these proceedings. However, the company’s creditors or the Crown Prosecution Service may also bring proceedings to open receivership or compulsory liquidation proceedings.

We assist directors and creditors in applying for the opening of insolvency proceedings and in navigating these proceedings to safeguard their interests.

The purpose of administration and receivership proceedings is to reorganize the company.

This reorganisation requires the drafting up of an administration or receivership plan, the aim of which is to ensure the reorganisation of the business as a going concern, the preservation of jobs, and the settlement of liabilities.

We assist the debtor in drafting and structuring, within the framework of a plan, sustainable solutions that enable the business to continue a going concern and liabilities to be settled.

In judicial liquidation proceedings (very seldom in receivership), the sale of all or part of the debtor’s assets as part of a disposal plan may be considered.

The aim of disposal of the the business (as a whole or a business unit) is to ensure the continuation of operations capable of operating independently, to preserve all or part of the associated jobs, and to settle the liabilities.

We assist potential buyers in preparing and submitting takeover bids that comply with legal requirements and meet their needs.

The transfer of assets under court order is followed by the execution of the transfer deeds.

Working alongside the insolvency practitioners or buyers, we assist them in formalising the transfer deeds to ensure that the transfer of assets or businesses is carried out in accordance with the terms of the court order.

Creditors whose claims arose prior to the opening judgment of an insolvency proceedings must, to avoid forfeiture, submit their claims and security interests against the debtor’s liabilities in order to participate in the distribution of dividends.

These claim submissions are subject to the claim verification procedure; and may, in this context, be contested by the debtor and the insolvency practitioner

We assist the debtor or creditors in asserting their rights within the framework of the claim verification procedures.

The director plays a key role in the management of the company. As such, the provisions of Insolvency law provide for measures designed to hold directors accountable for their management; and legal action for assets shortfall is one such measure.

The purpose of a legal action for assets shortfall is to hold the director, deemed to have acted negligently in their management, liable for all or part of the liabilities of the debtor in judicial liquidation.

This action has serious consequences for the director and must be considered at the first warning signs in order to limit any ground for mismanagement should insolvency proceedings be initiated.

We advise directors on how to manage insolvency risks whilst the company is still solvent, but also on how to defend their interests should they be sued by the liquidator.

The debtor’s creditors could, by virtue of the support they have provided to the debtor, face proceedings for improper support in the context of the debtor’s compulsory liquidation. The summons of a creditor for improper support (financial support deemed excessive or wrongful) tends to result in that creditor being required to bear all or part of the debtor’s liabilities.

We advise creditors on how to manage the risk of providing financial support whilst the debtor is solvent, as well as on how to defend their interests in the event of a summons by the insolvency practitioner.