Historically, the French restructuring system has always been perceived as a debtor-friendly system. In recent years, however, changes to the French legislation have favoured creditors' interests and the courts have favoured a number of lender-led restructures, enabling lenders to take control of the debtor from its existing shareholders.

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

The reform resulting from Order no. 2021-1193 dated September 15, 2021 is applicable to proceedings initiated as of October 1, 2021

French insolvency law is undergoing a far-reaching reform, 7 years after the last major reform that came from Order No. 2014-326 of March 12, 2014. This reform is the result of Order No. 2021-1193 amending Book VI of the French Commercial Code, adopted by the Council of Ministers on Wednesday, September 15, 2021 (the Order).

Yeni Gelişme

4299 sayılı ve 14 Temmuz 2021 tarihli Cumhurbaşkanlığı kararı ile Çerçeve Anlaşmalar kapsamında gerçekleştirilen finansal yeniden yapılandırma işlemlerini ve bu işlemler için tanınan teşvikler ve vergi muafiyetlerini düzenleyen Bankacılık Kanunu’nun geçici 32. maddesinin geçerlilik süresi iki yıl daha uzatıldı. Geçici 32. Madde ve Çerçeve Anlaşma’ya ilişkin bültenlerimize aşağıdaki bağlantılardan ulaşabilirsiniz:

Değişiklik Ne Getiriyor?

Recent development

With a presidential decision numbered 4299 and dated 14 July 2021, the effectiveness of Temporary Article 32 of the Banking Law regulating the financial restructuring transactions and related incentives and tax exemptions contemplated under the Framework Agreement has been extended for an additional two years. Please refer to the following links for our alerts on the introduction of Temporary Article 32 and the Framework Agreement:

What’s new?

AML changes for court-appointed liquidators

Important changes for court-appointed liquidators to the regulations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) will come into force on 9 July 2021.  These changes provide that, for a court-appointed liquidator:

The High Court has released its judgment in Re Halifax NZ Limited (In liq) [2021] NZHC 113, involving a unique contemporaneous sitting of the High Court of New Zealand and Federal Court of Australia.

The real lesson from Debut Homes – don't stiff the tax (wo)man

The Supreme Court has overturned the 2019 Court of Appeal decision Cooper v Debut Homes Limited (in liquidation) [2019] NZCA 39 and restored the orders made by the earlier High Court decision, reminding directors that the broad duties under the Companies Act require consideration of the interests of all creditors, and not just a select group. This is the first time New Zealand’s highest court has considered sections 131, 135 and 136 of the Companies Act, making this a significant decision.

Five years after it refused to pay rent and took the landlord to the High Court, and two years after it was placed into liquidation on account of unpaid rent, the final branch of litigation brought by the directors of Oceanic Palms Limited (in liq) has been cut down by the Supreme Court.