Draft bill n°1.094 on the modernisation of corporate law provides for the creation of a conciliation procedure for debtors engaged in commercial or craft activities who are experiencing legal, economic or financial difficulties.
This new procedure is inspired by an existing one in the neighbouring country and is designed to prevent companies experiencing financial difficulties from suspending payments by facilitating an amicable settlement.
What would this procedure involve?
The conciliation process would be confidential and voluntary. If a debtor is experiencing legal, economic or financial difficulties, whether actual or presumed, and has not been in a state of suspension of payments for more than a fortnight, they may apply to the President of the Tribunal de première instance for the appointment of a conciliator.
The conciliator's mission would be to facilitate an amicable agreement between the debtor and its primary creditors, as well as, where applicable, its regular contractors, with the aim of resolving the company's difficulties.
Furthermore, at the debtor's request and following consultation with participating creditors, the conciliator may organise a partial or total sale of the business.
What outcome if an amicable agreement is reached?
At the joint request of the parties, the President of the Tribunal de première instance may record their agreement and make it enforceable.
Furthermore, the debtor may request the Tribunal de première instance to homologate the agreement, provided that the following three conditions are met:
- the debtor is not in suspension of payments or the agreement reached puts an end to it;
- the terms of the agreement are such as to ensure the continued operation of the business;
- the agreement does not prejudice the interests of non-signatory creditors.
Subsequently, the conciliator may be appointed as an agent to implement the agreement.
Approval of the agreement would mark the conclusion of the conciliation procedure.
During the entire period of its execution, the recorded or approved agreement would suspend or prohibit any legal action and would suspend or prohibit any individual lawsuit against both the debtor's movable and immovable property with the aim of obtaining payment of the debts that are the subject of the agreement.
The agreement would also suspend, for the same period, the deadlines set for the creditors party to the agreement, on pain of forfeiture or cancellation of the rights relating to the claims mentioned in the agreement.
What if no agreement is reached?
Should no agreement be reached, the conciliator would be required to submit a report to the President of the Tribunal de première instance. Upon receipt of this report, the President will terminate the conciliator's mission and the conciliation procedure, without any recourse.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
