Judicial reorganisation in France: a French lawyer for companies, creditors and buyers
Is your French subsidiary, customer or target company in judicial reorganisation (redressement judiciaire)?
We assist foreign directors, shareholders, parent groups, creditors and buyers at each stage of the procedure.
FACCHINI Law Firm, a French law firm for insolvency proceedings
Maître Angélique FACCHINI, avocat registered with the Lyon Bar (Barreau de Lyon), handles judicial reorganisation in France for foreign parties, in Lyon, in Paris and throughout France.
We explain each step in English and represent you before the court.
We act for businesses, whether companies or sole traders, and never for the personal over-indebtedness of private individuals (surendettement des particuliers).
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What is judicial reorganisation in France?
It is one of the three main French insolvency procedures, alongside safeguard proceedings (procédure de sauvegarde) and judicial liquidation (liquidation judiciaire).
It applies to a business in cessation of payments (cessation des paiements) whose recovery is not manifestly impossible.
Governed by Articles L. 631-1 to L. 632-4 of the French Commercial Code, it aims to continue the business, preserve jobs and pay the debts.
Before any opening, an insolvency proceedings lawyer in France examines with the director which procedure suits the company.
Redressement judiciaire and receivership
In English, redressement judiciaire is sometimes translated as receivership, but that word usually evokes a receiver taking control of assets, often for a secured creditor.
The French procedure is collective: it stops individual creditor action and seeks a plan for all creditors.
Before judicial reorganisation: amicable procedures
Two confidential out-of-court procedures, mandat ad hoc and conciliation, let a person appointed by the court help the company negotiate with its main creditors.
When is judicial reorganisation opened in France?
Cessation of payments
The company cannot pay its debts that have fallen due out of its available assets (Article L. 631-1).
Filing within 45 days
The director must apply for the opening within 45 days of the cessation of payments, unless a conciliation has been requested within that period (Article L. 631-4).
Knowingly failing to apply can lead to a ban from managing (interdiction de gérer) (Article L. 653-8).
Petition by a creditor or the prosecutor
A creditor with a claim that is certain, of a fixed amount and due (certaine, liquide et exigible) (Article L. 631-5), or the public prosecutor, can also refer the case to the court, except during a conciliation.
The observation period in judicial reorganisation
Duration of the observation period
The opening judgment starts an observation period of up to 6 months, renewable once, which the public prosecutor can exceptionally have extended up to a maximum of 18 months (Articles L. 621-3 and L. 631-7).
Court-appointed officers
The court appoints a supervising judge (juge-commissaire) and a creditors’ representative (mandataire judiciaire) acting for all creditors.
A court-appointed administrator (administrateur judiciaire) can also be designated to assist or replace the management; this is compulsory in larger companies.
A freeze on prior debts
Prior debts can no longer be paid and creditors’ actions for payment stop (Article L. 622-21), while new debts arising for the needs of the business are paid when due.
Employment contracts continue, and unpaid prior wages are covered by the wage guarantee scheme (AGS), within its limits.
Outcomes of judicial reorganisation: continuation plan, sale plan or judicial liquidation
| Outcome | When the court chooses it | For the company | For creditors |
|---|---|---|---|
| Continuation plan (plan de redressement) | Serious prospects of recovery | Same legal entity; shareholders remain unless the plan changes the capital; plan of up to 10 years | Paid over time under the plan |
| Sale plan (plan de cession) | No viable continuation plan, but a suitable takeover offer | All or part of the business transferred to a buyer, without the prior debts | Paid from the sale price, by order of priority |
| Judicial liquidation | No plan and no buyer, or a plan that is not performed | Activity ends and assets are sold If the judicial reorganisation fails, a French judicial liquidation lawyer assists the directors at each stage of the procedure |
Paid by order of priority, often partly |
Continuation plan: the main rules
- Above legal size thresholds, creditors vote on the plan in classes of affected parties (Article L. 626-29).
- Where there are no classes, the court can impose uniform payment terms, but never a write-off, on a creditor who refuses the proposals (Article L. 626-18), and a creditor who does not answer the proposals within 30 days of receiving them is deemed to accept them (Article L. 626-5).
Judicial reorganisation in France: directors, shareholders and parent companies
Management powers
Depending on the administrator’s mission, the directors keep managing, manage jointly or are replaced, and any disposal outside the ordinary course of business requires the supervising judge’s authorisation (Article L. 622-7).
Personal exposure
Where faults are established, a director can face a ban from managing, faillite personnelle (a sanction that bars a director from running a business, unrelated to consumer bankruptcy) or the criminal offence of banqueroute, tried by the criminal courts (Articles L. 653-1 and L. 654-2).
If the procedure ends in judicial liquidation, liability for insufficient assets (Article L. 651-2) can be added.
Shareholders and parent groups
Under a continuation plan, the company keeps its legal personality and, as a rule, its shareholders, although the plan can provide for new financing and changes to the share capital (Article L. 626-3).
Under a sale plan, the business is transferred and, in most cases, the shareholders lose the value of their shares.
Foreign creditors in a French judicial reorganisation
Filing of claims (déclaration de créances)
Each creditor files its prior claim with the creditors’ representative within 2 months of publication in the BODACC (the official bulletin of civil and commercial notices), or 4 months if domiciled outside metropolitan France (Article R. 622-24).
A late claim is excluded from distributions unless the supervising judge grants relief (relevé de forclusion) (Article L. 622-26).
Ongoing contracts
Contracts in progress continue unless the administrator decides otherwise or, if there is none, the director with the approval of the creditors’ representative (Article L. 627-2).
They cannot be terminated for unpaid prior invoices, but services supplied after the opening must be paid (Article L. 622-13).
Payment and priority
Unsecured creditors (créanciers chirographaires) are paid after preferential and secured creditors.
Buying a company in judicial reorganisation in France
When to make an offer
Takeover offers go to the court-appointed administrator during the observation period, by the deadline it sets.
Content of the offer
The offer sets out the assets and contracts taken over, the price, the financing, the jobs and the guarantees (Article L. 642-2).
Once filed, it cannot be withdrawn or reduced, only improved.
The debtor, its de jure or de facto directors, their relatives and in-laws up to the second degree and the creditors appointed as controllers (contrôleurs) cannot bid; the court can lift the ban at the prosecutor’s request, except for the debtor itself and the controllers (Article L. 642-3).
The court’s choice
The court chooses the offer that best secures lasting employment and the payment of creditors and offers the best guarantees of performance (Article L. 642-5).
The buyer takes over the assets without the prior debts, and the employment contracts attached to the activity sold transfer automatically (Article L. 1224-1 of the French Labour Code), apart from any redundancies set out in the plan.
Why choose FACCHINI Law Firm for judicial reorganisation in France?
Maître Angélique FACCHINI, avocat at the Lyon Bar, handles insolvency proceedings for businesses, directors, creditors and buyers.
Our recognised expertise in insolvency proceedings in France
In 2025, FACCHINI Law Firm received the Trophée d’Or (gold award) of the Palmarès du Droit, organised by Le Monde du Droit in Lyon, in the Entreprises en difficulté - Restructuring category (businesses in difficulty and restructuring).
Trophée d’Or
Entreprises en difficulté - Restructuring
Palmarès du Droit
Lyon 2025
Our role as judicial reorganisation lawyer in France
FAQ: judicial reorganisation in France (redressement judiciaire)
1. What does redressement judiciaire mean in English?
It translates as judicial reorganisation: a French court procedure for a company in cessation of payments whose recovery remains possible.
In American English, the same procedure is spelled judicial reorganization.
French official sources in English also call it judicial redress, and the business press sometimes calls it judicial recovery.
2. Is judicial reorganisation a form of bankruptcy?
In British usage, bankruptcy generally refers to individuals and insolvency to companies.
We act for businesses, whether companies or sole traders, and never for the personal over-indebtedness of private individuals (surendettement des particuliers).
3. Can a company in safeguard proceedings be converted to judicial reorganisation?
Yes: safeguard is opened only for a company that is not in cessation of payments (Article L. 620-1), and the court can convert it into judicial reorganisation or judicial liquidation (Article L. 622-10).
4. How long does a redressement judiciaire last?
The observation period lasts up to 12 months, exceptionally 18 at the prosecutor’s request, and a continuation plan can then run for up to 10 years.
5. Can a foreign creditor take part in a French judicial reorganisation?
Yes: it files its claim with the creditors’ representative, within 4 months of publication in the BODACC if domiciled outside metropolitan France.
6. What happens if a claim is filed late?
It is excluded from distributions and cannot be enforced against the company while the plan is being performed, nor afterwards if the plan’s commitments have been met.
Relief can be requested within 6 months of the BODACC publication, if the delay was not the creditor’s fault or was due to the debtor’s omission (Article L. 622-26).
7. Can a creditor petition for the judicial reorganisation of a French debtor?
Yes, if its claim is certain, of a fixed amount and due, the debtor is in cessation of payments and no conciliation is in progress; the summons can only request the opening, not payment.
8. Can a foreign company buy a French company in judicial reorganisation?
Yes: any bidder not excluded by Article L. 642-3 can submit a takeover offer.
9. How can we check whether a French company is in redressement judiciaire?
Search the BODACC by SIREN company number and check the registration extract (extrait Kbis).
10. How are fees set in a judicial reorganisation matter?
Fees are set in a written fee agreement: a fixed fee, time spent at an agreed hourly rate, or a result-based fee added to one of these.
The first discussion is confidential.
Judicial reorganisation lawyer throughout France
We act before the competent courts throughout France: Lyon, Paris, Marseille, Grenoble, Dijon…
Maître Angélique FACCHINI also acts as a French business lawyer for foreign companies in company law, commercial contracts and commercial litigation.
Judicial reorganisation in Paris and Lyon
As a rule, the court with jurisdiction is the court of the place where the company has its registered office (Article R. 600-1): the commercial court for commercial and craft businesses, otherwise the judicial court (Article L. 621-2).
Larger companies and groups above legal size thresholds come before a specialised commercial court (Article L. 721-8).
In Paris and Lyon, as in ten other pilot areas, the commercial court is named tribunal des activités économiques (TAE) for a 4-year pilot scheme that began on 1 January 2025, and it also has jurisdiction over proceedings opened since then for other businesses, except certain legal professions (Law no. 2023-1059 of 20 November 2023, Article 26, and order of 5 July 2024).
Find us opposite the Rhône Prefecture in Lyon.
FACCHINI Law Firm
Contact Maître Angélique FACCHINI: judicial reorganisation lawyer in France
Director, shareholder, creditor or buyer facing a French judicial reorganisation?
Contact Maître Angélique FACCHINI by phone, email or through the form below: you will receive a reply within one hour.