A codification of existing legislation, the French Code of Civil Execution Procedures entered into force on 1st June past, both as regards its legislative provisions (Order 2011-21895 of 19 December 2011), and regulatory provisions (Decree 2012-783 of 30 May 2012).

The notorious law 91-650 of 9 July 1991 reforming civil execution procedures, together with its implementing decree 92-755 of 31 July 1992, were abrogated.

In France, when bankruptcy proceedings are instituted against a party involved in a pending arbitration it can result in conflicts between the applicable arbitration and insolvency rules. In that context, an arbitral tribunal sitting in France may be confronted with determining the extent to which they must defer to mandatory insolvency rules.

When it comes to securing enforcement, it is worth thinking outside the box, and looking at what can be done overseas: the French procedure code offers to litigants the ability to obtain the Court's authorization to perform conservatory measures which freeze your debtor's assets, by way of security, for the ultimate enforcement and performance of judgments made in substantive proceedings.

On October 11, 2010, the French Parliament adopted a significant amendment to the 2005 French Safeguard Procedure (procedure de sauvegarde), itself heavily inspired by the US Chapter 11 mechanisms. The new legislation introduces into French law summary safeguard proceedings -named "Accelerated Financial Safeguard" (sauvegarde financière accélérée). It grants legal basis to so-called "prepack" restructurings, i.e., out of court arrangements agreed to by a majority of creditors before the debtor files for a Court-driven restructuring.

A new form of bankruptcy procedure, Accelerated Financial Safeguard (sauvegarde financière accélérée, “AFS”) was adopted by the French Parliament on October 22, 2010.

France has amended the safeguard procedure by which debtors facing difficulties may restructure their financial arrangements.

On March 8, 2011, France's highest court, the Cour de cassation, confirmed that CMBS borrower, Heart of la Défense SAS (Hold), and its Luxembourg parent company, Dame Luxembourg Sarl (Dame), were entitled to Court protection in France under Safeguard Proceedings (sauvegarde). Safeguard is a French bankruptcy process that resembles the U.S. Chapter 11 debtor-in-possession procedures, used most recently (and notably) in connection with the bankruptcies of General Motors and Lehman Brothers.

The recent Cour de Cassation ruling in respect of the safeguard proceedings opened by Heart of La Défense SAS ("SAS Holdco") and its parent company, Sarl Dame Luxembourg ("Dame"), overturned the earlier decision of the Paris Court of Appeal in February 2010. The decision reinstated the safeguard proceedings of the two companies that were initiated in November 2008.

Introduction

On 8 March 20111, the French Supreme Court issued an important decision for the restructuring, finance and private equity communities and their advisers in connection with the on-going litigation surrounding the Coeur Défense restructuring.

Although safeguard proceedings have been used successfully as a negotiation tool in a number of high-profile cases (such as the Eurotunnel case), they have represented just 1 per cent of all insolvency proceedings in France since the Business Safeguard Act 2005 introduced the safeguard procedure in January 2006. The main reason for this lack of success is the continuing stigma that is attached to insolvency proceedings in France.