On August 6, 2015, France adopted legislation named after the French Minister of Economy, Emmanuel Macron ("Macron Law"), that is designed to promote economic growth, activity, and equal opportunity. What follows is a brief summary of the principal reforms to French insolvency law introduced by the Macron Law. As discussed in more detail below, these measures include the creation of specialized insolvency courts for large cases and the introduction of rules and procedures that permit "cramdown" of shareholder interests in French reorganization proceedings. The French insolvency regime creates a level playing field on which creditors will play an increasingly greater role in insolvency proceedings.
Specialized Insolvency Courts for Large Cases
France currently has 134 commercial courts. A commercial court has jurisdiction over an insolvency case if the debtor's corporate headquarters or its center of main interests ("COMI") is located in the court's geographical zone. This regime has been criticized, principally for two reasons. First, a small commercial court may not have the financial or human resources to handle large insolvency cases. Second, an affiliated group of companies may be subject to the jurisdiction of different commercial courts.
Under the Macron Law, France will create a limited numberperhaps 12of specialized insolvency courts. The precise number will be determined pursuant to a future implementing decree. The specialized insolvency courts will have jurisdiction over large cases (as defined below). Only a single specialized insolvency court will have jurisdiction over the insolvency proceedings of the members of an affiliated group of companies. This new regime should avoid inconsistencies or conflicts in court rulings and will increase predictability in large restructuring cases.
A specialized insolvency court will have jurisdiction over the debtor in safeguard, reorganization, and liquidation proceedings where:
the debtor has 250 or more employees and turnover of at least20 million; or the debtor has turnover of at least40 million; or the debtor is a holding company that, together with its operating subsidiaries, has more than 250 employees and turnover exceeding20 million; or the debtor is a holding company that, together with its operating subsidiaries, has turnover exceeding40 million. A specialized insolvency court may also have jurisdiction in a conciliation proceeding under certain circumstances when the debtor...