Company in difficulty
Compensation and protection for customers in the event of bank and insurance company failure
By Yasmine EDDAM12 June 2025The failure of a bank or insurance company is a dreaded event that can cause legitimate concern among individuals and business owners. Contrary to popular belief, the failure of a financial institution does not mean the automatic loss of funds or customer rights. Specific and robust protection mechanisms exist, designed to preserve the confidence and stability of the system. These mechanisms are part of an overall legal framework specific to regulated companies, which differs in many respects from the ordinary law governing companies in difficulty. Understanding how this protection works is essential for any depositor, investor or policyholder. The foundations of customer protection The protection of customers of companies in the financial sector is not covered by the ordinary law on insolvency proceedings. It is governed by specific legislation with a twofold objective: to prevent a crisis from spreading to other companies in the financial sector, and to...
Company directors: what are their responsibilities in the event of insolvency proceedings?
Commercial, business and competition law, Companies in difficultyWhen a company goes into receivership, reorganisation or compulsory liquidation, all eyes naturally turn to its directors. Whether they are managers, chairmen, managing directors, ex officio or even 'de facto' (i.e. those who, without an official title, actually exercise the power of management), they are in a...Judicial liquidation: understanding the procedure for selling a company's assets
Commercial, business and competition law, Companies in difficultySometimes, despite our best efforts, it proves impossible to turn around a company in difficulty. When the company's financial situation has deteriorated too much and there is no serious prospect of it continuing, French law provides for a final outcome: liquidation by order of the court. This term, often dreaded, marks the end of the company's activity...The observation period in safeguard and reorganisation proceedings: a key phase for the company's future
Commercial, business and competition law, Companies in difficultyOnce a safeguard or receivership procedure has been opened by the court, the company does not immediately move towards a definitive solution. It enters a transitional but absolutely crucial phase: the observation period. For the manager, employees, creditors and all the company's partners, the observation period is...Cross-border bankruptcy in Europe: how does it work?
Commercial, business and competition law, Companies in difficultyThe European Union has created a single market where companies can easily operate in several countries. But this economic freedom raises a thorny question: what happens when a company operating in several Member States runs into serious financial difficulties or goes bankrupt? Without common rules, this...Safeguard, recovery and liquidation proceedings: how do they start?
Commercial, business and competition law, Companies in difficultyWhen a company encounters financial headwinds, French law offers several legal frameworks for dealing with the situation. These mechanisms, often grouped together under the generic term of "collective proceedings", are not identical and respond to distinct situations and objectives. For an executive, a creditor...Security interests and insolvency proceedings: a new balance between creditors and debtors
Commercial, business and competition law, Companies in difficultyFor a long time, collective proceedings have had a hard time dealing with security interests. Ordinance 2021-1193 of 15 September 2021 attempts to resolve this conflict. It strikes a balance between safeguarding businesses and protecting creditors. This balance meets the expectations of practitioners faced with contradictory rules. The rethought relationship between two branches of the...Selling or ceasing your business: anticipating the tax consequences
Commercial, business and competition law, Companies in difficultyThe transfer or cessation of a business marks an important stage in the life of an entrepreneur. Whether it's a sale, retirement, donation, transfer to a company or, unfortunately, the company simply ceasing trading, these events often have significant and immediate tax consequences. The principle...Bankruptcy in the EU: what law governs your rights and obligations?
Commercial, business and competition law, Companies in difficultyWhen a company operating in several European Union countries is placed under insolvency proceedings (safeguard, reorganisation, liquidation, etc.), we have seen that European rules govern the jurisdiction of the courts and the recognition of decisions (for a full explanation of how cross-border insolvency proceedings work in Europe). But one...Seizures and specific securities: shares, company shares, European accounts and the impact of insolvency proceedings
Commercial, business and competition law, Companies in difficultyOur previous articles dealt with the most common precautionary measures, those relating to movable property, traditional claims such as bank balances, and security interests in buildings and businesses. However, the legal landscape is broader and more complex. Certain types of property, such as...
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