Restructuring in malis and voting in affected parties classes: are capital holders in the ejector seat? A look back at case law

Par Laura NGOUNE & Didier BRUERE-DAWSON

Published on Mergers & Acquisitions – October 2024

If a company is subject to collective proceedings (in this case, accelerated safeguard, safeguard or receivership), it may propose a safeguard or restructuring plan in order to continue as a going concern. This plan must be voted by the stakeholders (creditors and shareholders) and approved by the court.

The law provides two ways for stakeholders to give their opinion on the safeguard or receivership plan:

– individual or collective consultation with the parties; or

– since the end of 2021, through a vote within the framework of what the law refers to as affected parties classes.

A quick reminder about the concept of affected parties: the law provides for two main categories of classes of affected parties: creditors and shareholders/partners of the company.

Voting in affected parties classes certainly offers an advantage for stakeholders today, but it also carries a risk. Indeed, this type of voting creates a new system that allows the opposition of certain stakeholders to be overridden through the forced cross-class application of the plan, or cross-class cram down.

This article addresses the specific case of partners/shareholders and holders of securities that may give access to capital, classified within the categories of affected parties as “capital holders”.Our analysis has led to a key question for these capital holders: ‘Are they, in light of the reform, in an ejector seat when the company has to restructure itself under collective proceedings?’