Three years ago, the Commercial Code amended the procedure for declaring debts in France with the aim of simplifying the management of insolvency proceedings.

Before this reform, the only way for creditors (excluding employees) to declare their debts was to send their proof of debt to the receiver within 2 months (or 4 months for those living outside France) from the publication of the judgment opening the safeguard procedure, adminstration or liquidation – or be debarred.

The ordinance n°2017-748 dated 4 May 2017 to enter into force on 1 October 2017, completely reshapes the legal regime of the security agent, widely inspired by the security agent regime under OHADA law. Thus, French law continues its modernisation and attractiveness programme by creating a legal instrument able to compete with the security trustee involved in syndicated loans and bond issues in common law countries. The new provisions will clarify the legal regime of the security agent and reinforce creditors' protection, through:

Introduction

On 1 December 2016, the current president and Socialist leader, Francois Hollande, decided not to seek a second term as President of France. Mr. Hollande is the first French President to decide not to run for a second term.

It is not always easy to prioritize between the various goals pursued in every insolvency legislation, namely; the continuation of the company, preservation of the jobs, the general economic/public interest and the payment of dividends to creditors.

There is no clear hierarchy in French law amongst these major targets and French case law appears fairly pragmatic. However compared to Insolvency regulations in other countries, French legislation and French case law appear very protective of the interests of the employees.

This seems obvious when one considers, for example,

Introduction

On November 8 2016 Parliament adopted the Sapin II Act to promote:

• transparency;
• the fight against corruption; and
• the modernisation of the economy.

The act authorises the government to make decisions regarding legislative matters, including with regard to clarifying and modernising the status of security agents and their role in restructurings.

Le procès-verbal de carence établi lorsqu’aucun représentant des salariés ne peut être désigné ou élu est immédiatement déposé au greffe du tribunal saisi de la procédure collective. La contestation de ce procès-verbal doit intervenir, à peine de forclusion, dans les deux jours de celui-ci. Ce délai ne court qu’à compter de l’accomplissement de la formalité de dépôt du procès-verbal au greffe.

Apport de la loi de modernisation de la justice du XXIe siècle

Une nouvelle définition du motif économique de licenciement

La Loi Travail a intégré, à compter du 1er décembre 2016, deux nouveaux motifs de licenciement économique consacrés par la jurisprudence : la réorganisation de l’entreprise nécessaire à la sauvegarde de sa compétitivité et la cessation d’activité. La Loi Travail a également précisé la notion de difficultés économiques à l’aide d’indicateurs tels que la baisse significative des commandes ou du chiffre d’affaires ou encore l’augmentation des pertes d’exploitation (article L.1233- 3 du Code du travail).

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: