Companies in difficulty and restructuring
Lawyer specializing in ad hoc mandates and conciliation, negotiating in confidentiality
The ad hoc mandate and conciliation allow for the renegotiation of debts with creditors under a strict confidentiality agreement, either before a payment default or within 45 days following it in the case of conciliation. A third party appointed by the presiding judge assists the business owner in reaching an agreement. Neither of these procedures halts legal proceedings during negotiations; everything hinges on the preparation for the negotiation. Our lawyers conduct these negotiations with banks and creditors.
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- Partner lawyersin Paris and Neuilly-sur-Seine
Confidential does not mean protected
Ad hoc mandates and conciliation have a reputation for being "gentle" procedures: no publicity at the outset, no BODACC (Official Bulletin of Civil and Commercial Announcements), and the company's management retains control. All of this is true. However, a misconception often arises: the belief that confidentiality protects the company during the negotiation process.
That's not the case. A creditor who refuses to negotiate can still sue, seize, or terminate the contract. These procedures are only as good as the negotiation prepared beforehand: a precise statement of cash flow, a map of creditors, and a plan that the banks can support. A mediator doesn't replace this work; he facilitates it.
Our conviction is therefore simple: conciliation is not requested to buy time, but rather when a proposal is already in place. If the urgency stems from a creditor preparing to take action, other tools, such as the safeguard procedure, offer better protection.
Confidential
- No advertising at the opening
- No BODACC
- The leader remains in control
Not protected
A creditor who refuses to negotiate can still:
- assign
- to input
- terminate
The situations we deal with
Bank debt to be rescheduled
The banking pool is hesitant to renew the lines of credit or refuses to defer the due dates, even though the business remains profitable.
A key creditor is blocking everything
If a supplier, landlord or administration refuses a delay: a neutral third party can reopen the discussion.
New funding needed
A partner would agree to provide cash, but wants a guarantee of priority in case of subsequent difficulties.
Tensions between partners or shareholders
Disagreement over recovery strategy paralyzes the company: an ad hoc representative can facilitate dialogue.
Ad hoc mandate or conciliation: which to choose?
Both procedures are requested from the president of the court and remain confidential. They differ in their framework, their effects, and the degree of discretion they allow:
Duration of the two procedures
| Criteria | Ad hoc mandate | Conciliation |
|---|---|---|
| Condition | Company that is not in default of payments (article L. 611-3 does not set an express condition, but the procedure aims to prevent default) | Actual or foreseeable difficulty, and no cessation of payments for more than 45 days |
| Who is asking for it? | The leader | The leader alone |
| Duration | No maximum duration, depending on the mission set by the president | 4 months, extendable up to 5 months |
| Third party mission | Freely defined: negotiating with a creditor, a partner, associates | To facilitate a comprehensive agreement with the main creditors |
| Agreement reached | Ordinary contract, without special status | Observed (without publicity) or approved (published) |
| New money privilege | No | Yes, if the agreement is ratified |
| The proceedings have been dropped | No | Not during negotiations. Once an agreement has been recorded or approved, the signatory creditors can no longer take action regarding the debts in question. The judge may also grant payment extensions |
In practice, an ad hoc mandate is used to resolve a specific issue: a creditor, a contract, or a dispute between partners. Conciliation is appropriate when the company needs to renegotiate its entire debt and wants a legally binding agreement. The two can be used sequentially.
Can your company request mediation?
Two conditions, assessed at the time of application:
- a legal, economic or financial difficulty, proven or foreseeable: loss of a major client, excessive debt, deadline impossible to meet;
- no cessation of payments, or a cessation of less than 45 days Beyond that point, reconciliation is no longer possible.
The request is addressed to the president of the commercial court, or the economic activities court where one exists. For a self-employed professional, the request is addressed to the president of the judicial court or, in the 12 relevant jurisdictions, the president of the economic activities court, except for regulated legal professions, which fall under the jurisdiction of the judicial court. Only the company director can request it. If the conciliation expires without a request for a statement of facts or approval, a new one cannot be initiated within 3 months: the timing must be carefully chosen.
An often overlooked point: if the 45-day period following the cessation of payments expires during conciliation proceedings, the company director is exempt from filing for receivership for the duration of the proceedings. At the end of the conciliation, they must file without delay (French Supreme Court, November 20, 2024, No. 23-12.297). This exemption applies to the conciliation itself, not to the ad hoc mandate. This is one of the first things we verify.
When conciliation is open
How does our support work?
Diagnosis and choice of procedure
We examine the cash flow, the date of cessation of payments and the list of creditors, then decide between ad hoc mandate, conciliation or safeguard.
Preparation for the negotiation
We prepare the file: cash flow statement, statements of receivables and collateral, forecast, and a detailed financial proposal. This is the work that convinces the banks.
Application and nomination
We submit the application to the president of the court and, where appropriate, propose the name of the representative or conciliator.
Negotiation with creditors
We support the manager in discussions with banks and major creditors, alongside the appointed third party.
Securing the agreement
We draft the agreement and, for conciliation, request its confirmation or approval, depending on the company's needs.
Observation or approval: what is the value of the agreement?
At the end of a conciliation process, the signed agreement can have two statuses, with different effects:
- the observation At the request of the parties, the president of the court acknowledges the agreement and gives it executory force. There is no publicity. Like court approval, it prohibits the signatory creditors from taking action on the debts covered by the agreement during its execution;
- the approval The court reviews the agreement through a ruling. It verifies that the company is not insolvent, or that the agreement resolves any such insolvency, that the agreement ensures the continuity of operations, and that it does not harm the interests of creditors who did not sign it. The agreement is subject to publication (trade register, BODACC, legal notices journal) and automatically lifts any ban on issuing checks.
Approval unlocks a major advantage: the " new money privilege ." Those who provide cash under an approved agreement benefit from preferential payment if the company is later placed under safeguard, receivership, or liquidation proceedings. This is often what convinces a partner to finance a struggling company. This choice is therefore made upstream, when drafting the agreement, not at the end.
When conciliation is no longer sufficient: accelerated safeguarding
Sometimes an agreement is reached with the majority of creditors, but a few refuse to sign it. The conciliation process then ends there, as the agreement is only binding on those who have signed it.
Accelerated safeguard proceedings are available to a debtor engaged in conciliation who has prepared a draft plan designed to ensure the company's continued viability and likely to garner sufficient creditor support. These proceedings require accounts certified by an auditor or prepared by a chartered accountant. A cessation of payments does not preclude the procedure if it does not precede the request to initiate conciliation proceedings by more than 45 days. The plan is adopted by classes of affected parties: mandatory above thresholds set by decree, they are established upon initiation of proceedings below these thresholds (Article L. 628-4).
The draft plan is prepared during the conciliation process: we plan for it from the very beginning of the case. Our article on preventing difficulties and choosing the right procedure details the warning signs.
What accelerated backup entails
The documents required and the cost of the process
Even before submitting the application, three sets of documents must be gathered:
- the financial situation : latest accounts, cash flow situation, forecast for the coming months;
- debts : list of creditors, amounts, due dates, securities and guarantees granted;
- the proposal : what the company can pay, by what deadline, with what financing.
Regarding costs, the law does not set a fixed fee schedule for lawyers. In addition, depending on the person appointed, there is the fee for the mediator or ad hoc representative, the terms of which are set by the presiding judge. We provide a written estimate before we begin. Describe your situation to receive it.
The mistakes we see most often
- Request the procedure without a proposal. The mediator cannot negotiate without figures. A company that arrives without a plan wastes valuable time in the process.
- Believing that confidentiality stops creditors. During the proceedings, a creditor can still file a summons or seize property. This reaction must be anticipated.
- Wait for the cessation of payments. After 45 days of cessation, conciliation is no longer available.
- Forgetting to inform the partners. An approved agreement is published: customers, suppliers and employees must be notified beforehand, with a clear message.
Frequently asked questions about ad hoc mandates and conciliation
What is the difference between an ad hoc mandate and conciliation?
An ad hoc mandate is a flexible task entrusted to a third party to assist the company's management in negotiations, without any legal framework governing the resulting agreement. Conciliation is more structured: it has a limited duration, a designated conciliator, and the agreement can be formally recorded or ratified by a judge, offering effects that an ad hoc mandate does not provide. The former is suitable for targeted negotiations, the latter for broader debt issues.
Does conciliation stop creditor legal action?
No, not during negotiations: neither the ad hoc mandate nor conciliation halts legal proceedings. During conciliation, the judge can postpone or stagger debt payments. This period can extend up to two years if the creditor has issued a formal demand for payment or initiated legal action. For debts not yet due by a creditor who refuses the suspension proposed by the conciliator, the suspension is limited to the duration of the conciliator's mandate. Once the agreement is recorded or approved, the signatory creditors can no longer take action regarding the debts covered by the agreement during its execution. If several creditors threaten to take action simultaneously, safeguard proceedings, which freeze debts, should be considered.
How long does a conciliation process last?
The conciliation process lasts a maximum of four months, extendable by a reasoned decision for a total of up to five months. If a request for a finding or approval is filed before the end of the process, the conciliation continues until a decision is reached. If the conciliation expires without a request for a finding or approval, a new conciliation cannot be initiated within three months. The ad hoc mandate, however, has no maximum duration: it depends entirely on the mission defined by the presiding judge.
Is a mediation truly confidential?
Yes. Those involved in the proceedings or who are aware of them are bound by confidentiality. However, your creditors are aware, and a ratified agreement is made public: it is registered with the trade register, published in the BODACC (Official Bulletin of Civil and Commercial Announcements), and in the official gazette. Only the statement of facts remains private. Confidentiality therefore protects the proceedings, not the company's reputation. Prepare the message to your partners before the proceedings begin.
Should conciliation be requested before payments cease?
Not necessarily: conciliation remains possible if the cessation of payments has not lasted more than 45 days. If this period expires during the conciliation process, the director is exempt from requesting judicial reorganization, but must do so without delay at the end of the conciliation (French Court of Cassation, November 20, 2024). This rule applies to conciliation, not to ad hoc mandates.
How much does a conciliation procedure cost?
The law does not set a fixed fee for lawyers: we agree on fees in writing, after an initial discussion about the situation. Depending on the person appointed, the remuneration of the mediator or ad hoc representative may be added; their terms are set by the presiding judge. Preparing the case file (cash flow, creditors, financing plan) constitutes the bulk of the work.
Content prepared by the restructuring and insolvency department of ARST Avocats. Lead lawyer: Morgan Jamet, founding partner, Paris Bar. Sources: Service-Public.fr, ad hoc mandate; Service-Public.fr, conciliation procedure; Légifrance, Article L611-3 of the French Commercial Code; CNAJMJ, conciliation. Updated October 2026.