[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN FRANCE] 35
not suspend the payment obligations to creditors. 1.2. The public and judicial procedures 1.2.1. Court Protection of Companies in difficulty 1.2.1.1. Selection of the Procedure
1.2.1.2. Initiation
of the Judicial Safeguard or the Judicial Recovery procedure
Unless initiating a confidential procedure (see §1.1), the company shall submit a request to initiate a public debt restructuring procedure with its creditors. Once the Judicial Safeguard or Judicial Recovery has been initiated by the court, the company is protected from its creditors because the payments are suspended. Thus, legal proceedings for payment are suspended and now focus solely on determining the amount of creditor’s claims. 1.2.1.3. Observation Period A six-month observation period will be initiated to evaluate the company's financial situation. The observation period may be extended twice, up to a maximum of 18 months. During this period, the court appoints:
A company in difficulty may initiate one of the following procedures:
Judicial Safeguard if the company is not insolvent and demonstrates insurmountable financial difficulties, Judicial Recovery if the company is insolvent and its situation can be remedied,
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• Judicial Liquidation if the company is insolvent and its situation is irreparably compromised. If the company is insolvent, its legal representative shall submit a request for Judicial Recovery or Judicial Liquidation within 45 days of the Insolvency, otherwise he is liable to personal sanctions. These three procedures are public and initiated by a published judgment, in contrast to the prior confidential procedures (see §1.1).
a Judicial Representative, appointed by the court, shall list the company's debts, and represents the collective interests of creditors;
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a
Supervising
Judge
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responsible overseeing
for
the proceedings and settling
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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