French legislation has been well-known for making it difficult to restructure insolvent businesses in France.
Now, thanks to as series of small measures covering French corporate and insolvency law, life may be about to become easier. The measures are known collectively as the Macron law.
There are three measures that stand out as being particularly helpful for restructuring a French business when it becomes insolvent.
The first is the establishment of specialised Commercial Courts to deal with larger insolvencies, where just one court will now have the jurisdiction to deal with insolvency procedures for several companies in a group.
A second significant change is that directors may now be banned from managing a business if they have knowingly fail to file for insolvency at the latest within 45 days after payment failure.
As an additional safeguard it will now be mandatory to appoint a second administrator where a debtor company operates in more than one court jurisdiction in France outside the one where it is registered.
This rule will also apply if the debtor controls at least two companies undergoing insolvency proceedings or when the debtor is controlled or owned by a company subject to ongoing insolvency proceedings and the company itself holds or controls at least one other company which is also subject to insolvency proceedings.
The changes have been described as innovative and are expected to help make the insolvency processes in France move more smoothly and efficiently.