By Charlotte GAUCHON
24 March 2025
Between banking pragmatism and legal theories, syndicated lending and sub-participation transactions operate in a grey area. Their classification remains a headache for the courts and legal doctrine. An overview of recent debates and developments. 1. Syndicated loans: an elusive classification Multiple banks, a difficult classification Syndicated loans bring together several banks to finance a single borrower. Each institution lends a fraction of the total amount, according to a joint agreement. Article 1134 of the Civil Code governs these complex contractual relationships. But to which legal category should this arrangement be assigned? Joint venture: an inappropriate classification Case law has long been uncertain. Several rulings have attempted to equate syndicated credit with a joint venture (SAP). This classification poses a problem. Article 1871-1 of the Civil Code would imply that each member of the syndicate is jointly and severally liable for the company's debts. However, as the Court of...
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