Bankruptcy Law

The court competent to supervise a conciliation procedure is, pursuant to Articles L. 611-4 and L. 611-5 of the Commercial Code, the commercial court or the judicial court . The court with territorial jurisdiction is the one in whose jurisdiction the debtor, a legal entity, has its registered office or the one in whose jurisdiction the debtor, a natural person, has declared the address of its busi …

Substantive and formal conditions

The court competent to supervise a conciliation procedure is, pursuant to Articles L. 611-4 and L. 611-5 of the Commercial Code, the commercial court or the judicial court . The court with territorial jurisdiction is the one in whose jurisdiction the debtor, a legal entity, has its registered office or the one in whose jurisdiction the debtor, a natural person, has declared the address of its business or activity. In the absence of a registered office in France, the competent court is the one in whose jurisdiction the debtor has the principal center of his interests in France. If the registered office of the legal entity changes during the six months preceding the referral, the court in whose jurisdiction the initial registered office was located remains the only competent court. This period runs from the date of the amending entry in the Commercial Register and companies of the initial registered office .

Specific jurisdictional rules apply to companies that reach certain thresholds. Article L. 721-8, 4° of the Commercial Code provides that specialized commercial courts  have jurisdiction over conciliation proceedings when the debtor is: i) a company with at least 250 employees and net sales of at least EUR 20 million, or ii) a company with net sales of at least EUR 40 million, or iii) a company that owns or controls another company, within the meaning of Articles L. 233-1 and L. 233-3, when the number of employees of all the companies concerned is equal to or greater than 250 and the net sales of all the companies concerned are equal to or greater than EUR 20 million, or iv) a company which owns or controls another company, when the net turnover of all these companies is at least EUR 40 million. The referral to a specialized court is made by the debtor, the president of the court initially seized or the public prosecutor .

The president of the competent court is seized by a request from the debtor who sets out his economic, financial, social and asset situation, his financing needs and, where applicable, the means of meeting them . The application may not be made by a creditor, the public prosecutor or the president of the court and constitutes a simple option for the debtor, whereas he is obliged to request the opening of reorganization or judicial liquidation proceedings. Purely as an incentive, the conciliation procedure is controlled from beginning to end by the debtor, who is free to decide whether to open or close the procedure, at his or her own discretion . As a result, a debtor cannot be accused of mismanagement for not having requested the opening of a conciliation procedure. The objective is to convince the president of the court that recourse to this procedure or the granting of time-limits will enable the debtor to deal with the difficulties he has experienced. The debtor who wishes to obtain time to pay his professional debts must therefore necessarily refer to the court, and not to the juge de l'exécution (enforcement court) . In his request, the debtor can propose the name of a conciliator, whose identity and address he specifies . The request is accompanied by the debtor's unique identification number, a statement of claims and debts with a schedule and a list of the main creditors, the statement of assets and liabilities of the securities as well as the statement of off-balance sheet commitments, the annual accounts, the cash flow statement and the situation of the realizable and available assets, excluding operating values, and the liabilities due for the last three financial years, if these documents have been drawn up, a statement on honor certifying the absence of conciliation proceedings in the three months preceding the date of the request and a declaration indicating, if applicable, the assumption by a third party of the costs of the requested proceedings. The request specifies, if necessary, the date of cessation of payments. Where the debtor exercises a liberal profession subject to a legislative or regulatory status or whose title is protected, he must specify the professional order or authority to which he belongs .

As in the case of the ad hoc mandate, the legislator deems unwritten any clause that modifies the conditions of continuation of an ongoing contract in order to discourage recourse to the negotiated procedure, by reducing the debtor's rights or aggravating its obligations solely by virtue of the opening of conciliation proceedings . The same sanction applies to clauses that place more than three-quarters of the advisory fees of the creditors involved in the procedure on the debtor's account solely by virtue of the opening of conciliation proceedings . 

See CA Rennes, 18 October 2011, (LawLex not found in English), considering that the conciliation opened with respect to a commercial company by the president of the Commercial Court cannot be extended to a civil company of the same group, which falls under the jurisdiction of the judicial court.

The list of these courts, 18 in number, is set out in Appendices 7-1-1 and 7-1-2 of the regulatory part of the Commercial Code. They are the commercial courts of Bobigny, Dijon, Evry, Grenoble, Lyon, Marseille, Montpellier, Nanterre, Nantes, Nice, Orléans, Paris, Poitiers, Rennes, Rouen, Toulouse and Tourcoing.

CA Aix-en-Provence, 29 February 2008, LawLex202100005591JBJ.

Commercial Code, Art. L. 611-6 and R. 611-22.

Bankruptcy Law

25. Substantive and formal conditions

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Les notions juridiques connexes

25. Substantive and formal conditions

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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