Company in difficulty
Securing markets and payment systems: guarantee mechanisms in the face of systemic risk
By Yasmine EDDAM12 June 2025The stability of the global financial system rests on a delicate balance. The extreme interconnectedness between banks, investment firms and market infrastructures means that the failure of a single player can potentially trigger a devastating chain reaction. To prevent this risk, described as systemic, the legislator has put in place special legal mechanisms designed to isolate and contain crises. These mechanisms, which are often technical, create an exceptional regime that protects vital financial operations from the hazards of conventional collective proceedings. This article deciphers these legal 'firewalls', which form part of the overall framework for managing the difficulties of regulated companies, and explains how they ensure the continuity of financial flows, even in times of crisis. The vulnerability of the financial system to systemic risk The modern financial architecture, although efficient, is intrinsically exposed to the risk of rapid contagion. The failure of a major financial institution is not limited to...
Understanding the suspect period and its consequences for your company
Commercial, business and competition law, Companies in difficultyWhen a company is experiencing significant financial difficulties, the prospect of receivership or liquidation proceedings may become a reality. Even before such proceedings are officially opened by the court, a critical and often little-known phase begins: the suspect period. This period is not insignificant. The decisions taken, the...International bankruptcy: when and how do the French courts intervene?
Commercial, business and competition law, Companies in difficultyThe increasing internationalisation of trade and the location of companies means that there are more and more situations where financial difficulties extend beyond the borders of a single country, particularly for regulated companies operating internationally. What happens when a French or foreign company with links to France finds itself in financial difficulty?Understanding judicial liquidation: an essential guide for companies in difficulty
Commercial, business and competition law, Companies in difficultyFacing insurmountable financial difficulties is a dreaded ordeal for any company director. When recovery solutions seem out of reach, judicial liquidation becomes a concrete prospect. Although this procedure is difficult, it is governed by precise rules designed to organise the end of the business and to...The end of liquidation and professional recovery: what are the outcomes?
Commercial, business and competition law, Companies in difficultyWhen a company goes into compulsory liquidation, the outcome may seem inevitable: the disappearance of the business and the sale of the assets. However, the procedure must formally come to an end, and this end, known as closure, can take different forms with varying consequences, particularly for the individual debtor. In addition, for...Judicial liquidation: consequences for creditors and realisation of assets
Commercial, business and competition law, Companies in difficultyThe opening of a judicial liquidation procedure marks a turning point not only for the company and its director, but also directly for its creditors. Suppliers, banks, social security bodies, tax authorities, employees... all find themselves faced with a situation where the recovery of their debts becomes uncertain and...Commencement of compulsory liquidation: conditions and initial effects for the debtor
Commercial, business and competition law, Companies in difficultyThe prospect of compulsory liquidation is a critical time for any company and its director. Often dreaded, this procedure marks a decisive turning point, generally when financial difficulties reach a point of no return. It is important to understand the circumstances in which this procedure can be initiated and the immediate consequences...Companies in difficulty: understanding the penalties for managers
Commercial, business and competition law, Companies in difficultyNavigating a company through financial difficulties is a demanding ordeal for any manager. In addition to the operational and economic challenges, particular attention must be paid to the personal responsibilities that may be incurred. In the event of receivership or, more frequently, compulsory liquidation, a company director may find himself exposed to...Executive sanctions: procedure and remedies
Commercial, business and competition law, Companies in difficultyWhen a company encounters difficulties, the law provides for various mechanisms to try to turn it around or, failing that, to organise its liquidation under the best possible conditions. However, these procedures can also lead to the liability of directors being called into question, or even to their being punished. For an overview...Bankruptcy and related offences: the criminal penalties that threaten managers
Commercial, business and competition law, Companies in difficultyUnfortunately, a company's economic difficulties can extend beyond the commercial and financial sphere into the criminal sphere. When risky or even fraudulent management is suspected of having precipitated the company's downfall, the director is exposed to particularly severe penalties. In addition to the civil and professional penalties that can exclude them from the life of their company, they can also be...Personal bankruptcy and prohibition on management: the professional risks for the manager
Commercial, business and competition law, Companies in difficultyIn addition to the direct financial consequences for the company and potentially for the executive's personal assets, difficulties can lead to sanctions of another kind, just as formidable: professional sanctions. These are not aimed directly at the portfolio, but at the manager's very ability to practise his profession, to manage,...Liability for insufficient assets: protect your personal assets
Commercial, business and competition law, Companies in difficultyBusiness life is rarely a smooth ride. When difficulties accumulate and receivership becomes inevitable, a major fear emerges for managers: that of being personally liable for the company's debts out of their own assets. This very real threat has a name...Accelerated Safeguarding: a fast way to restructure your company's debts
Commercial, business and competition law, Companies in difficultyFinancial difficulties are a fact of business life. Fortunately, French law offers a number of tools for anticipating and dealing with them before a situation becomes irremediable. Among these tools, the accelerated safeguard procedure stands out as a fast and effective solution, particularly suited to companies that are experiencing financial difficulties....Subsequent creditors and recourse against third-party guarantors: specific situations
Commercial, business and competition law, Companies in difficultyThe complexity of insolvency law does not stop with the general rules applicable to claims arising prior to the opening of insolvency proceedings. Two other situations merit particular attention and raise important questions for creditors: what happens to claims arising after the opening of insolvency proceedings and what happens to claims arising after the opening of insolvency proceedings?Safeguard procedure: a lifeline before the storm?
Commercial, business and competition law, Companies in difficultyWhen a business is sailing through troubled waters, facing headwinds - be they economic difficulties, major disputes or financial tensions - the instinct may be to wait, hoping for a lull. However, waiting until the situation reaches the critical point of suspension of payments is not always the best course of action...Unpaid vendors, lessors, secured creditors: specific situations in the event of insolvency proceedings
Commercial, business and competition law, Companies in difficultyWhen a company enters collective proceedings (safeguard, reorganisation or judicial liquidation), the general rules, such as the declaration of claims or the stay of proceedings, apply to all its previous creditors. However, the law recognises that certain situations are special and deserve specific treatment. This is particularly the case if you are...Who are the key players in insolvency proceedings in France?
Commercial, business and competition law, Companies in difficultyWhen a company is experiencing significant financial difficulties, French law provides for specific mechanisms to try to save it or, if this is not possible, to organise an orderly winding-up of its business. These procedures, known as sauvegarde, redressement judiciaire or liquidation judiciaire, may seem complex...Companies in difficulty: who is affected and when does the situation become critical?
Commercial, business and competition law, Companies in difficultyDealing with financial difficulties is often a dreaded ordeal for any entrepreneur. Whether it's a drop in business, a costly dispute or an accumulation of unpaid bills, it's essential to understand at what point the situation changes from a simple cash flow problem to one that gives cause for legal concern. French law provides a framework for these situations...Company in difficulty: first steps and prohibitions for creditors
Commercial, business and competition law, Companies in difficultyThe announcement of the opening of insolvency proceedings - safeguard, receivership or compulsory liquidation - against a customer, supplier or business partner is often a source of great concern for its creditors. Will I get paid? What do I have to do? Can I continue to demand payment? These questions are...Safeguard plan, recovery plan, sale plan: what outcomes for a company in difficulty?
Commercial, business and competition law, Companies in difficultyWhen a company enters the safeguard or receivership procedure, the observation period that begins is a phase of intense activity aimed at finding a lasting solution to its difficulties. The aim is, as far as possible, to come up with a 'plan' for the future. But what exactly does this mean?Opening insolvency proceedings: the legal process explained
Commercial, business and competition law, Companies in difficultyWhen a company is going through such intense economic turbulence that its future is threatened, the opening of collective proceedings - safeguard, receivership or compulsory liquidation - often becomes an unavoidable step. Far from being an insignificant or improvised step, it marks the entry into a strict legal framework, designed to deal with the...
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