Reform of Insolvency proceedings Act
Act of July 26, 2005 should be modified based on the conclusions of the report made by a specific committee of French National Assembly of Jan. 31, 2007. Purpose is to make procédure de sauvegarde (close to reorganization procedure of US Bankruptcy Code Chap.11) and again simplify winding-up procedure. Reform should be made by means of Government Ordinance. The above report had observed that :
1. Conciliation procedure. Debtors sometimes refrain from having their rescheduling or new money agreement recognized by commercial court. Conciliator could have in the coming weeks the right to file a petition for such recognition.
2. Sauvegarde (the French–style Chap.11). Projected ordinance could reinforce the insolvent debtor manager’s powers and modify the organization and power of creditors’ committees in charge of representing creditors and vote the reorganization process agreement (hedge funds and bond creditors should be included in these committees). Eurotunnel case inspired such revisions.
3. Redressement and liquidation judiciaires. Some modification and simplification could be decided (employees lay-off, insolvency conditions….
See Report attached.