Lawyers specialising in securities and guarantees

Securities law to serve your interests

All creditors face the same uncertainty: will the debtor pay? Collateral is the legal answer to this question. They give the creditor a preferential right over certain assets - or the commitment of a third party - which guarantees that he will be paid, even in the event of default.

The field is vast. It covers personal securities (guarantee, autonomous guarantee), the movable collateral (pledge, collateral, retention of title) and real estate collateral (conventional, legal and judicial hypothecs). The Order of 15 September 2021, which came into force on 1 January 2022, has radically overhauled the whole of this law - from the formalism of surety bonds to the creation of a single register of movable sureties.

Our firm assists creditors and debtors in this demanding area of litigation, which requires simultaneous mastery of civil law, commercial law and enforcement procedures.

The founding principle

Article 2284 of the Civil Code sets out the general right of pledge: «Anyone who is personally obliged is obliged to fulfil his commitment on all his movable and immovable property, present and future». Sureties allow the creditor to go beyond this principle by obtaining a preferential right or a resale right over specific assets.

Bond

Drafting, contesting and disputing surety undertakings

Mortgages

Registration, realisation and release of real estate collateral

Collateral

Pledge, collateral, retention of title and security interest

Securing your receivables

You are granting credit, financing an operation or entering into a deferred performance contract. The question is not whether your debtor is reliable today, but what will happen if he can no longer pay tomorrow. A well-chosen and correctly constituted surety makes the difference between a creditor who recovers his debt and an unsecured creditor who receives nothing.

The choice of security depends on the nature of the debt, the assets available and the risk of insolvency proceedings. A surety bond offers different protection from a mortgage; a pledge of business assets does not offer the same security as a retention of title. Each situation calls for a tailor-made analysis.

Our firm handles

Auditing existing cover and recommending cover adapted to the risk profile
Drafting and negotiating surety, pledge and collateral deeds
Registering security interests in the register of movable security interests or in the land registration office
Guarantees in the event of the debtor's default
Taking protective measures (provisional judicial mortgage, protective attachment) to preserve your rights before judgment
Debt recovery through the forced realisation of collateral

Contesting a surety or bond

You are being sued as a guarantor. A creditor registers a judicial mortgage on your property. Your assets are encumbered by securities, the validity of which you dispute. The law on sureties provides debtors and guarantors with means of defence that have been strengthened by the 2021 reform.

Guarantees are the most frequently disputed area. Article 2300 of the Civil Code now requires the guarantor's commitment to be proportionate to his income and assets at the time it is entered into. Article 2297 requires a handwritten statement, failure to comply with which renders the undertaking null and void. The professional creditor has a duty to warn when the principal debtor's commitment is unsuited to his financial capacities. These are all levers that our firm systematically exploits.

Our areas of defence

Challenging the formal validity of the guarantee (handwritten note, annual information)
Exception of disproportionality of the guarantor's undertaking (art. 2300 C. civ.)
Failure by the creditor to fulfil his duty to warn (art. 2299 C. civ.)
Challenging the registration of a provisional judicial mortgage before the execution judge
Application for release of irregular or disproportionate securities
Invoking the benefit of subrogation (art. 2314 C. civ.) and the benefit of discussion

Securities and insolvency proceedings

The opening of a collective procedure - safeguard, reorganisation or judicial liquidation - upsets the established order between creditors. Some securities survive, while others are neutralised. The time at which they are created, the quality of their publication and their ranking determine what you will recover.

Creditors holding a mortgage or pledge must act quickly: declare their claim within the two-month time limit, check that it was registered before the opening judgment, and watch out for nullities during the suspect period. As for the guarantor, since the reform it has benefited from unified protections - in particular the suspension of proceedings during the observation period.

Our involvement in group procedures

Declaration of privileged or secured claims within the legal deadlines
Defending the rank and validity of your securities before the procedural bodies
Contesting the nullity of the suspect period (art. L. 632-1 C. com.)
Claiming property subject to a retention-of-title clause
Representation before the official receiver and the commercial court
Price distribution and exercise of preferential rights

Frequently asked questions

What are the different types of security?

Sureties fall into two categories. Personal sureties, where a third party undertakes to pay the debt (surety bond, independent guarantee). And real sureties, where an asset is used as collateral (hypothec on a building, pledge on a business, pledge on a movable asset). The 2021 reform also enshrined security interests (retention of title, security trust), which are particularly effective in the event of insolvency proceedings.

What changes will the 2021 reform of security law bring?

The Order of 15 September 2021 recasts Book IV of the Civil Code. The major changes concern surety bonds (simplified formalities, enhanced proportionality, codified duty to warn), movable sureties (single register, assignment of debt as security) and immovable sureties (transformation of special immovable property liens into special legal hypothecs).

How much does it cost to set up a security company?

The cost varies according to the type of security. Registering a conventional mortgage involves notary fees and a land registration tax. Pledging a business requires registration with the commercial court registry. Lawyers' fees cover drafting, negotiation and litigation. We will draw up a precise estimate after analysing your situation.

How do I contest a bond?

There are a number of ways of doing this. Nullity for formal defects (handwritten wording not in compliance with article 2297 of the Civil Code), disproportionality of the undertaking in relation to the guarantor's capacity (article 2300), failure by the creditor to fulfil his duty to warn, or extinction by subrogation when the creditor has allowed the loss of a security from which the guarantor could have benefited.

Are my securities protected in the event of insolvency proceedings?

This depends on the type of security and when it was created. Securities duly registered before the opening judgment remain effective. However, securities set up during the suspect period may be cancelled, and the ban on registering new securities applies from the time of the opening judgment. A rapid audit of your guarantees is essential as soon as your debtor's difficulties are announced.

Lawyer for securities and guarantees