New reform covering financial difficulties and insolvency in France”

by Marc ANDRE Acting on the wishes of the new political majority, the French Government has issued a Ministerial Order (ordonnance) – a method which reduces parliamentary debate – in order to substantially modify the legislation relating to the treatment of companies in difficulty and insolvency. The Order of 12 March 2014 (Ordonnance 2014-326 du 12 mars 2014 ), which came into force on 2 July 2014 (Decree 2014-736 du 30 juin 2014 with 145 articles), comprises 117 articles and introduces some innovative solutions. Firstly, it introduces two new procedures: • the Accelerated Safeguard Procedure (Sauvegarde Accélérée), which will exist alongside the Accelerated Financial Safeguard Procedure; • the Professional Recovery procedure (Rétablissement Professionnel), designed to help insolvent individuals with no assets. Building on previous reforms, the Order also aims to improve the treatment of companies in difficulty while proposing a more satisfactory balance between the debtor's rights and his/her creditors’ rights.