[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN FRANCE] 42
1.2. The public and judicial procedures 1.2.1. Court Protection of Companies in difficulty 1.2.1.1. Selection of the Procedure A company in difficulty may initiate one of the following procedures:
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:
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, Judicial the company is insolvent and its situation is irreparably compromised. Liquidation if
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a Representative, appointed by the court, shall list the company's debts, and represents the collective interests of creditors; Judicial a Supervising Judge responsible for overseeing the proceedings and settling certain claims by the company; and
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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). 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
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a Judicial Administrator who supports and assists the company to find solutions. The Judicial Administrator:
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supervises the company's daily operations, including financial transactions and major decisions (such as employee layoffs, asset sales, etc.). The Judicial Administrator can refuse management from taking actions that would diminish the company's asset value. If the Court requires it, the administrator shall approve any
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ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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