Accelerated backup procedure
Verified 26 November 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Where the conciliation procedure has failed as a result of the refusal of certain creditors to participate in a conciliation agreement, the company may apply to the court for the opening of an accelerated safeguard procedure. The duration of this procedure is up to 4 months.
An accelerated safeguard procedure may be requested only by the head of company or legal representative business (for example, manager of a SARL, President of a LOCK).
This request for initiation must be made to the commercial court or the court of justice according to the activity carried out:
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Commercial or craft activity
Once the conditions are met, the company must complete the following application form:
Request to open an accelerated safeguard procedure
The documents to be attached to the request for initiation are as follows:
- Annual accounts for the last financial year
- Extract K-bis or certificate of registration in the National Register of companies (RNE)
- Cash flow situation
- Projected profit and loss account
- Number of employees employed at the date of the opening request
- Quantified statement of claims and liabilities
- Statement of assets and liabilities of collateral and statement of off-balance-sheet liabilities
- Summary inventory of company assets
- Name and address of the representatives of the staff delegation of the Social and Economic Committee (ESC) if they have already been appointed
- Copy of the decision to initiate the procedure reconciliation
- Financing statement and, where the debtor prepares consolidated accounts, cash flow statement
- Cash flow budget for the next 3 months
- Forecast financing plan
- Draft backup plan
This application must be filed or sent in 2 copies :
- at the registry of the commercial court of the place where the company has its registered office
- or online through the digital court
Liberal activity
Once the conditions are met, the company must complete the following application form:
Request to open an accelerated safeguard procedure
The request for the opening of an accelerated safeguard procedure shall be lodged at the Registry of the Court of Justice in which the head office of the company is located.
The documents to be attached to the request for initiation are as follows:
- Annual accounts for the last financial year
- Extract K-bis or certificate of registration in the National Register of companies (RNE)
- Cash flow situation
- Projected profit and loss account
- Number of employees employed at the date of the request
- Quantified statement of claims and liabilities
- Statement of assets and liabilities of collateral and statement of off-balance-sheet liabilities
- Summary inventory of company assets
- Name and address of the representatives of the staff delegation of the Social and Economic Committee (ESC) if they have already been appointed
- Designation of the professional body or authority of the company exercising a regulated liberal profession
- Copy of the decision to initiate the procedure reconciliation
- Financing statement and, where the debtor prepares consolidated accounts, cash flow statement
- Cash flow budget for the next 3 months
- Forecast financing plan
- Draft backup plan
The court shall rule on the opening of proceedings after a report by the conciliator on the conduct of the proceedings reconciliation and the prospects for adoption of the draft plan. He shall have the possibility of obtaining all documents and instruments relating to the conciliation procedure.
The judgment initiating the accelerated safeguard procedure appoints the parties to the procedure and establishes a short period of observation.
Appointment of interveners to the proceedings
In the judgment initiating the accelerated safeguard procedure, the court shall designate the different speakers to the proceedings:
- Judicial agent
- Judicial administrator
- Judge-Commissioner
The court shall invite the social and economic committee (CSE) where it exists, to appoint a representative from among the employees of the company.
Judicial agent
The judicial representative shall be responsible for the verification of the indebted. In this capacity, he receives the statements of creditors and the statement of wage claims for verification.
He shall then draw up a list of the claims declared and make proposals for admission or rejection. The judge-commissioner decides the fate of the claim.
Please note
The judicial agent is paid by the company. This remuneration is fixed by a decree for each of its tasks (e.g. verification of claims). It depends on the number of employees and the turnover of the company.
Judicial administrator
The court shall designate one or more court administrators. It is compulsory when the company has more than 20 employees and a turnover that exceeds €3 million HT: titleContent.
The court shall assign him one of the following tasks:
- Supervision of the company in difficulty in its management
- Assistance with all or some management acts
The judgment initiating the accelerated safeguard procedure also allows affected party classes. The formation of affected party classes is mandatory in the following cases:
- The company has more than 250 employees and a net annual turnover that exceeds €20 million.
- Net annual turnover exceeds €40 million.
Please note
The court administrator is paid by the company. This remuneration is fixed by a decree for each of its tasks (e.g. assistance tasks, preparation of the social and economic assessment). It depends on the number of employees and the turnover of the company.
Establishment of an observation period
The purpose of the observation period is to arrive at a safeguard plan, under the control of the court and, in most cases, with the help of a court administrator.
Payment periods may be imposed on creditors.
The observation period lasts 2 months. However, at the request of the company in difficulty and the court administrator, the court may extend this period up to 4 months.
The Chief Executive and the Judicial Administrator shall submit the draft safeguard plan to the affected party classes which must be established under the accelerated safeguard procedure.
FYI
the draft plan presented by the company in difficulty is the one prepared under the conciliation procedure.
Each affected party class must vote on the plan. For the plan to be accepted, the decision must be taken by each class of assigned parties by a 2/3 majority of the votes held by the members.
For creditors that are included in the accelerated backup plan, the indebted is frozen. This means that they cannot sue the company in difficulty to get their claims settled.
Creditors who did not participate in the draft plan drawn up during the conciliation procedure must to declare their claims within two months of the initiation of the procedure.
Warning
Employees and maintenance creditors are not affected by the accelerated safeguard plan.
At the end of the observation period, there are 2 possibilities:
- Accelerated Backup Plan Adoption
- Lack of an accelerated safeguard plan: the court ends the accelerated safeguard procedure.
FYI
Accelerated backup cannot be converted to recovery or judicial liquidation.
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Accelerated backup procedure
Initiation of the accelerated procedure