Bankruptcy Law

The law allows debtor companies of significant economic size to proceed with the consultation of creditors collectively by grouping them according to the nature of their claim. Prior to the entry into force of the Ordinance of 15 September 2021 , Article L. 626-29 of the Commercial Code provided for consultation of creditors gathered in committees, for debtors whose accounts were certified by a st …

Composition of the classes of affected parties

The law allows debtor companies of significant economic size to proceed with the consultation of creditors collectively by grouping them according to the nature of their claim. Prior to the entry into force of the Ordinance of 15 September 2021 , Article L. 626-29 of the Commercial Code provided for consultation of creditors gathered in committees, for debtors whose accounts were certified by a statutory auditor or drawn up by a chartered accountant and whose number of employees was greater than 150 or whose turnover exceeded EUR 20 million. Directive No 2019/1023 of 20 June 2019  subsequently introduced the broader category of “classes of affected parties”, which the Ordinance of 15 September 2021 transposed into French law and substituted for the category of creditor committees.

The change in the name and composition of the committees has been accompanied by a change in the thresholds for convening assemblies. From now on, Article R. 626-52 of the Commercial Code reserves the right to convene creditors gathered in classes of affected parties to debtors who employ at least 250 employees and have a net turnover of at least EUR 20 million, or to debtors who can prove a net turnover of at least EUR 40 million, at the date of the application to open the procedure. The new paragraph 2 of Article L. 626-29 extends these rules to companies that own or control another company, within the meaning of Articles L. 233-1 and L. 233-3, as long as all the companies concerned meet the thresholds mentioned. However, at the request of the debtor, the bankruptcy judge may authorize the application of the rules below these thresholds .

The former Article L. 626-30 of the Commercial Code identified two categories of creditors: credit institutions  and the main suppliers of goods or services, grouped into two separate committees. Under the terms of Article L. 626-30, I of the Commercial Code, as it stands following the transposition ordinance, affected parties include not only creditors whose rights are directly affected by the draft plan, but also, and this is a new feature, the holders of the capital, consisting of the members of the extraordinary general assembly or the assembly of partners, the special assembly mentioned in Articles L. 225-99 and L. 228-35-6 and the general assemblies of the masses referred to in Article L. 228-103, if their shareholding in the debtor's capital, the articles of association or their rights are amended by the draft plan.

Whereas there were only two committees before the ordinance came into force, it is now possible to divide the creditors into as many classes as there are distinct economic interests. Indeed, according to Article L. 626-30, III, the receiver divides the assigned parties into classes representing a sufficient community of economic interest among the previous creditors on the basis of verifiable objective criteria. Nevertheless, creditors with security interests in the debtor's assets, for their secured claims, and other creditors, shall be divided into separate classes, and holders of capital must form one or more classes. The receiver shall give notice by any means to each affected party that it is a member of a class and shall provide notice to the affected party of the means by which it may communicate electronically . The allocation into classes must respect the subordination agreements, concluded before the opening of the procedure, which the parties have brought to the attention of the receiver, at the latest within ten days from the receipt of the notice of the receiver . Otherwise, such subordination agreements are not enforceable against the procedure .

Ordinance 2021-1193 of 15 September 2021 amending Book VI of the Commercial Code.

Directive No 2019/1023 of 20 June 2019 on preventive restructuring frameworks, debt forgiveness and discharges, and measures to increase the efficiency of restructuring, insolvency and debt forgiveness procedures, OJEU Law No 172 of 26 June 2019, 18.

See for an application, CA Paris, 11 May 2016, LawLex202100003158JBJ (S).

Bankruptcy Law

256. Composition of the classes of affected parties

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256. Composition of the classes of affected parties

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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