Bankruptcy Law

Where the plan is not approved in accordance with the provisions of Article L. 626-30-2, Article L. 631-19, I(5) allows the court, at the request of the debtor, of the receiver with the agreement of the debtor, or of an affected party, to adopt the plan. It may be imposed on the classes that voted against the draft plan under the conditions set out in I, excluding its first paragraph, and in II of …

Plan adopted against the wishes of the classes of parties assigned to it

Where the plan is not approved in accordance with the provisions of Article L. 626-30-2, Article L. 631-19, I(5) allows the court, at the request of the debtor, of the receiver with the agreement of the debtor, or of an affected party, to adopt the plan. It may be imposed on the classes that voted against the draft plan under the conditions set out in I, excluding its first paragraph, and in II of Article L. 626-32. In other words, when certain classes of affected parties have not achieved a two-thirds majority of the votes held by the members having cast a vote, thereby preventing the adoption of the plan in accordance with the provisions of Article L. 626-30-2, Article L. 626-32 allows the refusal of the dissenting classes to be overridden.

Article L. 626-32, I, 2° contemplates the case in which the plan has been approved by a majority of classes of affected parties authorized to vote. The text allows the court to approve the plan provided that at least one of these classes is a class of secured creditors or ranks higher than the class of unsecured creditors. Even if this majority is not reached, the court may approve the plan adopted by a minority of classes of affected parties. This is the case where the plan has been approved by at least one of the classes of affected parties authorized to vote, other than a class of equity holders or any other class which, after determining the value of the debtor as a going concern, it can reasonably be assumed would not be entitled to any payment, if the order of priority of creditors for the distribution of the assets in court-supervised liquidation or of the sale price of the business pursuant to Article L. 642-1 were applied.

In both of these cases, the court's approval of the plan is subject to two conditions. Firstly, the claims of affected creditors of a class that voted against the plan must be paid in full by identical or equivalent means where a lower-ranking class is entitled to a payment or retains an interest under the plan . However, the court may decide to derogate from this condition, at the request of the debtor or of the receiver with the agreement of the debtor, where such derogations are necessary in order to achieve the objectives of the plan and where the plan does not excessively harm the rights or interests of affected parties . On the other hand, no class of assigned parties may, under the plan, receive or retain more than the total amount of its claims or interests .

In addition, Article L. 626-32, II allows the court to adopt the plan at the request of the debtor, the receiver with the agreement of the debtor, or an affected party, where one or more classes of equity holders have been formed and have not approved the plan. To this end, the court must verify that the company's workforce reaches the threshold of 250 employees and EUR 20 million in net sales or EUR 40 million in net sales . Where the debtor is a company that owns or controls another company within the meaning of Articles L. 233-1 and L. 233-3 of the Commercial Code, these thresholds are assessed at the level of all the companies concerned. The court must also check whether it is reasonably possible to assume, after determining the value of the debtor as a going concern, that the holders of capital in the dissident class or classes would not be entitled to any payment or to retain any interest if the creditors' order of priority for the distribution of assets in compulsory liquidation, or of the sale price of the business pursuant to Article L. 642-1, were applied. In addition, where the draft plan provides for a capital increase subscribed by cash contributions, the court must ensure that the shares issued are offered in preference to the shareholders, in proportion to the part of the capital represented by their shares. The court may close the plan provided that it does not provide for the transfer of all or part of the rights of the class or classes of shareholders who have not approved the draft plan.

C. com. R. 626-63, applicable to the receivership procedure by reference to art. R. 631-37.

Bankruptcy Law

565. Plan adopted against the wishes of the classes of parties assigned to it

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Les notions juridiques connexes

565. Plan adopted against the wishes of the classes of parties assigned to it

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

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