French Distressed Companies Law Modernized

Order No. 2014-326 of March 12 (the "Order"), adopted pursuant to enabling legislation No. 2014-1 of January 2, significantly modernizes French distressed companies law.  

The primary objective of the Order is to encourage recourse to mediation proceedings and conciliation proceedings, the efficiency and success of which have been demonstrated consistently in recent major financial restructurings. 

The Order also makes important changes to insolvency proceedings, the volume of which has greatly increased in recent years. For example, 509 safeguard proceedings were opened in 2006, versus 1,633 in 2013, and 46,950 reorganization and judicial liquidation proceedings were commenced in 2003, versus 63,101 in 2013. The increasing incidence of such proceedings has encouraged the government to make them more efficient by maintaining the architecture of insolvency proceedings established in 2006, but by modifying the way that such proceedings are organized.