The opening of safeguard or reorganisation proceedings does not automatically terminate a current agreement notwithstanding any contractual clause providing for termination.

Termination by a lessor

The Court of Cassation has considered whether company insolvency proceedings may be extended to a managing director and shareholder who has made payments to himself from the company's bank account.

Background

On 16 September 2021, ordinance 2021-1193 implemented the European Directive on preventive restructuring frameworks into French law. The Ordinance applies to proceedings opened from 1 October 2021.

Key features

The French Government made temporary changes to the insolvency law in order to protect companies, employees and managers from the cash flow consequences of the state of health emergency (Government order dated 27 March 2020 (No. 2020-341)).

When a debtor is in cessation of payments, it generally has 45 days from the 'cash-flow insolvency' to file for insolvency. The Government decided that the cash-flow insolvency of an enterprise shall be assessed based on its status on 12 March 2020 or the time of the expiry of the state of health emergency increased by three months.

Insolvency Proceedings

The French legislator has published the Law on the Modernisation of 21st Century Justice (n°2016-1547) on 18 November 2016, in order to complete the regulation of the four ordonnances issued over the two years before that date modifying insolvency law. Key changes applying to insolvency proceedings opened after 19 November 2016 are as follows:

Key point

An assignee of future debts was bound by discounting and rebate arrangements concluded between the assignor and its customers despite having given notice of the assignment.

The facts

M supplied goods to customers. It factored its debts to Bibby in 2000. The Factoring Agreement provided that all future debts due to M by customers were to vest upon their creation in Bibby.

Bibby did the following to try and protect its position – ultimately the steps proved unsuccessful:

There have been a couple of cases in the last few months where the impact of changes to the details of the various registers at Companies House has been considered by a Court. This article considers the points of interest for lenders that arise out of those decisions

What use is an LP registration certificate?

Not much in the case of a certificate that relates to a limited partnership (one to which the Limited Partnership Act 1907 applies not the limited liability partnership variety).

Key Point

The High Court has given some guidance on the effect of an order to restore a dissolved company to the register where a secured creditor has rights against that company and there has been a disclaimer by the Crown.

Facts

Key point

The Joint special administrators of an investment banking entity succeed in obtaining a direction to allow them to distribute client assets quickly.

Facts

Key point

The Court of Appeal has recently given detailed guidance on what happens to the surpluses available in the insolvency of companies after dealing with an appeal in relation to the so-called Lehman Waterfall Application dealt with in an earlier Update.

Facts