Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Recast Insolvency Regulation“) applies to insolvency proceedings opened after 26 June 2017. Ordinance of 2 November 2017 (the “Ordinance“) amended the French Code de commerce to reflect the Recast Insolvency Regulation by inserting a new Title IX into Book VI.
Judicial remedies against the opening of main insolvency proceedings
In line with article 5 of the Recast Insolvency Regulation, the Ordinance provides that any creditor may now challenge a decision opening main insolvency proceedings on the grounds of international jurisdiction by appeal or third party opposition.
Secondary insolvency proceedings
According to the Recast Insolvency Regulation, secondary insolvency proceedings no longer have to be liquidation proceedings. Secondary proceedings in a Member State can run in parallel with the main proceedings taking place in another Member State, but can only be opened if the debtor has an establishment within the territory of that other Member State. Secondary proceedings can also only affect the assets of the debtor situated in the territory of the Member State in which the secondary proceedings are opened.
The Ordinance therefore provides that secondary judicial reorganization and liquidation proceedings may now be requested by the debtor, its creditors, the public prosecutor and the insolvency practitioner responsible for the main proceedings.
Only the debtor may however request the opening of a secondary sauvegarde proceedings.
The Ordinance clarifies that the date of suspension of payments in secondary proceedings may differ from the date of suspension of payments in the main proceedings.
The insolvency practitioner responsible for the main proceedings ongoing in another Member State is allowed to challenge the opening of a secondary proceedings in France.
Insolvency of corporate groups
Under article 60 of the Recast Insolvency Regulation, an insolvency practitioner appointed in relation to a member of a group can ask the court in another Member State to suspend any measure related to the realisation of the assets of any other member of the corporate group in its own insolvency proceedings, provided certain conditions are met. This is to allow (and encourage) the implementation of a single solution applicable to all members of the group.
It is also now possible to coordinate various insolvency proceedings opened against several members of a corporate group. This coordination procedure can be requested by insolvency practitioners responsible for any insolvency proceedings opened against any member of the group.
The Ordinance provides that the coordinator can be chosen from among the judicial administrators or creditors representatives (mandataires judiciaires) but not from among practitioners already appointed in any of the ongoing insolvency proceedings.
An insolvency practitioner is free to decide not to take part in the coordination process and may decide not to follow the advice of the coordinator.
The Ordinance clarifies the judicial competence of the new specialised Commercial Courts which have jurisdiction in particular over insolvent companies established in several Member States.