[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN FRANCE] 43
payments initiated by the company; and negotiates with creditors to establish a debt restructuring plan.
1.2.2.1. The Global Sale of the business of the Company The Court can decide to sell the business: thus, the court initiates a tender procedure for all assets and employees of the company and try at least to maintain part of the business activity by the buyer. The Court receives offers from potential buyers and selects among them, based on three criteria: - the continuation of activities, - the preservation all or part of the employees, - and the repayment of the payable debts. If no buyer wants to acquire the business of the company, or if the Court rejects all offers, the assets of the company are sold separately. 1.2.2.2. The separate Sale of the Company's Assets In this case, the profit from the sale of assets is distributed to the creditors of the company, according to priority rules (employees have the highest priority, followed by procedural costs and tax debts, and lastly, unsecured creditors).
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At any time during the observation period, the court may be requested to approve a debt restructuring plan negotiated with creditors. A typical plan can include both debt rescheduling and debt forgiveness. The company may also request the Court to approve the sale of the business of the company if a buyer is found. The judicial administrator may also initiate a public sale process for the business of the company with the approval of the company. If the situation worsens during the observation period and/or if there is no prospect of reaching an agreement with the creditors, the court may decide to convert the Judicial Safeguard or Judicial Recovery procedure into a Judicial Liquidation of the company (see 1.2.2). 1.2.2. Judicial Liquidation The Judicial Liquidation aims to sell all the company's assets to pay its debts. The Court will appoint a Liquidator who: - shall list the company's debts; and - sell the business or the assets (separately) of the company. Even during Judicial Liquidation, the Court may order the continuation of business activities for 3 months in special circumstances (such as the time to shut down machines in the industrial sector).
2. From the Perspective of Creditors of a Company in difficulty 2.1 The steps to submit a declaration of claim In case of opening of a public and judicial procedure against a company, any creditor may declare his claim with the Judicial Administrator or the Liquidator. Moreover, the company shall provide a prior list of creditors to the Judicial Administrator
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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