A Reform in Search of a Purpose: French Insolvency Law Changes (Again!)

Abstract

This article charts the additions made by the French legislator to the insolvency framework, reformed relatively recently in 2005 and 2008, consisting in a fresh set of amendments in 2014 aimed at encouraging more take up of upstream rescue proceedings as well as improving the existing procedures. IntroductionIn 1967, the roots of modern French insolvency law were laid down.1 The model was constituted, at its most basic, by a twin-track approach to insolvency, according to which a business could be sent down a rescue or a liquidation track (with the logical result) on the basis of the situation in which the business found itself when it first appeared before the court. Under the supervision of an office-holder, named the syndic, a procedure would be instituted and would go through a number of phases before being finalised. The 1967 formulation was perhaps one of the earliest articulations of the concept of rescue, 2 although Chapter 11 of the US Bankruptcy Code is more famous and has been much admired and much emulated across the world. In essence, the 1967 model changed only a little in the way it was transformed in the 1980s, during a period in which many European jurisdictions re-examined their insolvency laws, although priority was to be given to rescue unless the business could quite clearly only be a candidate for liquidation. The 1980s' articulation of insolvency consisted of three separate laws, introducing (for the first time) a pre-insolvency and diagnostics process as well as the regulation of office-holders alongside the twin-track system by then hallowed in usage.3 The system as maintained by the Laws of 1984-1985 lasted in essence till the mid-2000s, albeit with some changes

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