Introduction

The ongoing financial crisis has not left France untouched. The number of company insolvencies rose considerably in 2013: while judicial rehabilitation proceedings remained stable, liquidation proceedings increased by 4% from 2012, and “safeguard” proceedings (a procedure inspired by “Chapter 11” proceedings in the United States) increased by 9%. Pre-insolvency proceedings such as judicially-supervised conciliation and ad hoc mediation reached an all-time high, 24% over 2012.

The U.S. Court of Appeals for the Third Circuit, in In re Philadelphia Newspapers LLC,1 has ruled that secured creditors do not have a right, as a matter of law, to credit bid their claims when their collateral is sold under a plan of reorganization. The Third Circuit held that secured creditors may be barred from credit bidding where a debtor's reorganization plan provides secured creditors with the "indubitable equivalent" of their secured interest in the assets. The court's ruling follows a similar ruling last year by the U.S.