PRACTICAL GUIDE: WHAT IS THE AD HOC MANDATE PROCEEDING?

Ø A preventive proceeding (Born of the practice of the commercial courts before being codified by statute, this proceeding is open to any business carrying out a commercial or craft activity and which is not in a state of cessation of payments) *.

Ø A proactive proceeding (Only the director of the business in difficulty may request its opening and has the possibility of proposing the name of the ad hoc agent who will be appointed to assist them).

Ø A management-led proceeding (The debtor is in no way divested of the administration and disposal of its assets. An ad hoc agent will be appointed, at the director's request, by the President of the Court, who will set the agent's mission according to the difficulties faced by the debtor, which may be of any kind).

Ø A flexible proceeding (The ad hoc mandate is often used as a technique preliminary to another proceeding, capable of serving to prepare conciliation (French amicable proceedings) or safeguard proceedings. It may also be used autonomously to resolve one-off crisis situations such as, for example, obtaining payment deadlines from a creditor or difficulties resulting from an order requiring the business to pay a very high amount).

Ø A confidential proceeding (The opening of the ad hoc mandate proceeding is not subject to any publication, and any person involved in the proceeding who undermines its confidentiality could be subject to criminal sanctions. Moreover, the debtor is not required to inform the employee representative bodies of the opening of the proceeding.).

Ø A customisable proceeding (The business in difficulty chooses only those creditors and partners with whom it wishes to negotiate, in particular in order to obtain payment deadlines or debt write-offs).

Ø An adaptable proceeding (The ad hoc mandate proceeding is not limited in time. In practice, it may be the prelude to conciliation (French amicable proceedings) on account of the short statutory duration of the latter) **.

Need to go further ❓

❓ How do the various stages of the ad hoc mandate proceeding take shape (Preparation / Negotiation with the business's partners / Conclusion of an agreement and drafting of a protocol)?

❓ What is the cost of an ad hoc mandate proceeding?

❓ What is the enforceability of an amicable agreement concluded within the framework of an ad hoc mandate proceeding?

❓ Within the framework of an ad hoc mandate proceeding, is it possible to organise a partial or total sale of the business that could be implemented, where applicable, within the framework of subsequent safeguard, judicial reorganisation or judicial liquidation proceedings?

❓ Can a clause of a contract modify the conditions for continuing an ongoing contract by reducing the rights or aggravating the obligations of the debtor solely on account of the opening of an ad hoc mandate proceeding?

NB* : Pursuant to the provisions of the Order of 27 March 2020 adapting the rules relating to business difficulties, the state of cessation of payments is assessed in light of the debtor's situation as at 12 March 2020.

NB** : Pursuant to the provisions of the Order of 27 March 2020 adapting the rules relating to business difficulties, the statutory duration of conciliation (French amicable proceedings) is extended by operation of law by a period equivalent to that of the state of public health emergency plus three months. This measure is necessary in view of the practical difficulty of conducting negotiations with creditors and taking operational decisions during the current lockdown period.

In addition, the Order provides that the legal provisions imposing a three-month waiting period to open new conciliation (French amicable proceedings) are not applicable until 24 August 2020 (at least). It will therefore be possible, during this period, to carry out several conciliation proceedings in succession.

🤝 SAINT-LOUIS AVOCATS is at your disposal on +33 (0)1 44 32 07 00 / contact@saintlouisavocats.com to assist you in connection with the difficulties faced by your company in these unprecedented times.