The continued modernisation of the French economy has been a long and difficult process but, as a former British prime minister was fond of saying, “there is no alternative”.
Emmanuel Macron, the Minister of Economy, Finances and Industry, and other members of the French government are currently championing a new bill relating to “growth and buying power” (called « Loi sur la croissance et le pouvoir d’achat »), whose goal is to free up sectors of the French economy currently burdened by restrictive practices and corporate interests. The proposal remains hotly contested by some unions and many politicians, even within the Socialist Party currently in power, who strongly object to some of the bill’s provisions, such as the proposal to allow stores in France to be open on Sunday.
Modernising France’s insolvency law is an important part of re-energising the French economy. A new statute dated January 2, 2014 (effective on July 1, 2014) introduced important changes to the French insolvency legal system, such as (i) the addition of a new accelerated safeguard procedure, (ii) the ability in conciliation proceedings to have a pre-pack sale for all or part of the debtor’s assets and (iii) new rights for members of creditor committees with respect to restructuring plans.
Recently, a select committee of French Parliament members (which reviews the bill before the French Assembly votes on the bill) approved one aspect of the new Macron Bill, namely the reform of the French commercial courts. The bill seeks to create a new specialised tribunal with jurisdiction on complex insolvency cases, with the goal being to introduce specialisation, efficiency and avoid disparities and discrepancies in such courts’ rulings. Not surprisingly, French commercial judges (who are currently not professional judges but merchants appointed by their peers) did not welcome this reform, which was viewed as a challenge to, and a distrust of, the current system (or possibly the judges). C’est la vie!
The same committee of French MPs also approved the principle of a “squeeze-out” procedure that seeks to compel majority shareholders to hand a business over to creditors if they are no longer able to turn the company around themselves. This decision has been highly anticipated since last year as such reform will be a profound change to the existing French system and will bring it closer to that of the Anglo-American approach.