Restructuring
What are the differences between
judicial reorganization and judicial insolvency
proceedings in France, with or without continuation
of business activities (liquidation proceedings)?
All procedures are designed to support companies in crisis through restructuring before insolvency occurs, or to help them continue or orderly terminate business activities in the event of insolvency. Understanding these procedures helps identify suitable solutions early on.
Our lawyers specializing in insolvency law will advise you from the first signs of financial difficulty and help you select and implement the appropriate procedure.
Summary
- What is a judicial reorganization procedure (procédure de sauvegarde)?
- What is the purpose of judicial insolvency proceedings with continuation of business activities (procédure de redressement judiciaire)?
- What happens in judicial insolvency proceedings with liquidation (procédure de liquidation judiciaire)?
- How to decide between judicial reorganization proceedings and judicial insolvency proceedings with or without continuation of business activities?
What is a judicial reorganization procedure (procédure de sauvegarde)?
Court-supervised restructuring proceedings are a preventive, voluntary procedure initiated by management before a company becomes insolvent. These proceedings enable control over existing debts, reorganization of the company, and negotiation of a repayment plan with creditors. The goal is to continue business operations under court protection.
Our lawyers will assess your financial situation, help you file an application with the court, and assist you in drawing up a reorganization plan.
What is the purpose of judicial insolvency proceedings with continuation of business activities (procédure de redressement judiciaire)?
This procedure is intended for companies that are insolvent but have the potential for restructuring. It enables them to temporarily continue business activities under court supervision and through the appointment of an insolvency administrator. A restructuring plan can be created that provides for the repayment of debts over several years.
Our lawyers will work with you to develop a suitable strategy and represent your interests in court.
What happens in judicial insolvency proceedings with liquidation (procédure de liquidation judiciaire)?
Once the insolvency court determines that the company’s financial or economic situation no longer permits it to continue its business activities, the court initiates either a sale of the company or final liquidation. Liquidation leads to the cessation of business activities and the realization of assets to satisfy creditors. Current contracts may be terminated, and employees may be dismissed.
Our lawyers will help you limit damages, secure realizable assets, and protect management from liability risks.
How to decide between judicial reorganization proceedings and judicial insolvency proceedings with or without continuation of business activities?
This decision depends on the company’s financial situation. A quick analysis of liquidity, debt, and future profitability is essential.
Our lawyers will conduct a comprehensive legal and financial analysis and work with you to determine the appropriate course of action for continuing or terminating business activities.
You have any other questions?
Please feel free to ask them directly here.