Companies in difficulty and restructuring
Lawyer specializing in safeguard proceedings: taking action before the cessation of payments
The safeguard procedure protects a company experiencing difficulties before it becomes insolvent. The court freezes debts and suspends legal proceedings, the company's management retains control, and the company has up to 12 months to develop a plan with its creditors. Our lawyers prepare the application, defend it in court, and negotiate the plan.
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- 3 partner lawyersParis, Neuilly-sur-Seine, Aix-en-Provence
Why is the backup request almost always made too late?
Safeguard proceedings have a particularity that many business leaders discover at the worst possible time: they are only available to companies that are not yet insolvent .The day available assets are no longer sufficient to cover outstanding debts, the door closes. Only receivership or liquidation proceedings remain.
But the natural reaction is to wait. We negotiate a delay with the bank, postpone a social security payment deadline, and hope for the contract that will revive cash flow. These weeks are precisely the ones where the safeguard procedure offered the most leeway.
Our conviction is simple: safeguarding is not a last resort. It is a management tool, to be considered as soon as cash flow forecasts show that the company will not survive the coming months without restructuring its debt.
The backup window
The situations we deal with
Cash flow under pressure
Bank, tax or social deadlines impossible to meet in the coming months, while the business remains viable.
Creditor threatening to take action
Summons announced, seizure in preparation, supplier demanding to be paid in cash: the safeguard stops individual proceedings.
Conciliation blocked
An agreement is almost reached with the creditors, but some refuse: the accelerated safeguard procedure makes it possible to impose it.
Trustee manager
The manager acted as guarantor for the company's loans: the procedure also protects him, during the observation period and in the plan.
Can your company request a backup?
Two conditions, assessed by the court on the day it makes its decision:
- no cessation of payments : the company can still meet its debts as they fall due with its available assets;
- difficulties that she cannot overcome alone, whether they are legal, economic or financial: loss of a major client, excessive debt, litigation that threatens the business.
Safeguard proceedings are available to commercial companies, craftspeople, farmers, professionals, and sole traders, including micro-entrepreneurs. Applications are filed with the commercial court, or with the economic activities court in the twelve cities where it has existed since 2025 (including Paris, Nanterre, Lyon, and Marseille). For a professional activity, the case is generally filed with the judicial court.
One important limitation to be aware of: if the company is already insolvent, a safeguard procedure is no longer possible. The manager must then request the opening of a receivership within 45 days. This is often the first point we check, because a poorly planned request wastes valuable time.
The first question to ask yourself
What happens from the opening judgment onwards?
The judgment immediately changes the balance of power with the creditors:
- liability freeze : debts incurred before the judgment can no longer be paid, except in authorized cases;
- halt to proceedings : creditors can no longer take action for payment or seize assets;
- cessation of interestexcept for loans taken out for one year or more;
- contracts maintained : a landlord or supplier cannot terminate solely on the grounds that proceedings have been initiated;
- declaration of claims : creditors must declare their claims to the judicial representative within two months of the publication of the judgment in the BODACC.
The company's management remains in control. A court-appointed administrator may be assigned to oversee or assist them. Their appointment is mandatory when the company has at least 20 employees and €3 million in annual revenue (excluding VAT). A court-appointed representative acts as the creditor's agent.
How does our support work?
Emergency diagnosis
We verify that the company is not in default of payments and that safeguarding is the right path, as opposed to ad hoc mandate or conciliation, which remain confidential.
Application preparation
Statement of difficulties, cash flow situation, list of creditors and current contracts, forecast: we compile the file and prepare for the hearing.
Observation period
We support the manager in dealings with the administrator and the agent, secure essential contracts and contest claims that have been wrongly declared.
Backup plan
We negotiate the plan with the creditors, or with the classes of affected parties for the companies concerned, and then defend it in court.
Are you unsure whether your company is already insolvent?
Safeguarding, conciliation or restructuring: how to choose?
The choice depends mainly on two questions: is the company insolvent ,and does it need the proceedings to stop immediately?
When an agreement is already in sight with the majority of creditors, conciliation followed, if necessary, by accelerated safeguard is often the quickest route. When several creditors threaten to act simultaneously, traditional safeguard proceedings offer better protection.
| Criteria | Conciliation | Backup | Judicial reorganization |
|---|---|---|---|
| Cessation of payments | No, or for less than 45 days | No | Yes |
| Who is asking for it? | The leader | The leader alone | The manager, a creditor, or the prosecutor |
| Confidentiality | Yes | No, published judgment | No, published judgment |
| The proceedings have been dropped | No | Yes | Yes |
| Business management | The leader | The leader, monitored or assisted | The assisted manager, or the administrator |
Accelerated backup: when the agreement is almost reached
The accelerated safeguard procedure extends a conciliation process that failed because some creditors refused the agreement. The company must have prepared a draft plan during the conciliation process, and its accounts must be audited by a statutory auditor or prepared by a chartered accountant.
The procedure lasts a maximum of 4 months. Its advantage: to have the plan adopted by a vote of the creditors grouped into classes, without waiting for the agreement of each one.
The mistakes we see most often
- Wait for the cessation of payments thinking that safeguarding is a cumbersome procedure. It's the opposite: the earlier it is requested, the more ambitious the plan can be.
- Let the partners discover the procedure in the BODACC. The judgment is published: customers, suppliers and banks must be informed beforehand, with a clear message on the continuation of the business.
- Arriving in court without a cash flow forecast. The court wants to understand how the company will finance the observation period.
Frequently asked questions about the backup procedure
How long does a backup procedure take?
The observation period lasts six months, renewable once, for a maximum of 12 months. If a plan is adopted, it can extend over a maximum of 10 years. Accelerated safeguard proceedings, however, last no more than four months. In practice, the duration depends on how quickly the company and its creditors agree on the plan.
Does the leader retain control of the company?
Yes. In safeguard proceedings, the company director continues to manage the business. The court-appointed administrator, when appointed, oversees or assists with certain actions, but does not replace the director. This is one of the major differences with receivership, where the administrator may be given a broader mandate.
What happens to the personal guarantee of the manager?
Creditors cannot pursue the individual guarantor during the observation period. Once the plan is adopted, the guarantor can take advantage of the payment extensions and discounts it provides. The protection is therefore not absolute, but it prevents the bank from immediately taking action against the company director.
Is the safeguard procedure public?
Yes. The opening judgment is published in the BODACC (Official Bulletin of Civil and Commercial Announcements), and the company's partners can access it. While discretion is essential, the ad hoc mandate and conciliation, which remain confidential, should be considered first. The choice is made on a case-by-case basis, depending on the urgency and the number of creditors involved.
Are employees affected by the plan?
Wage arrears are not subject to the discounts and payment deadlines of the plan; they are paid as a priority. Employment contracts remain in effect throughout the procedure. If the plan includes a reorganization, labor law regulations continue to apply, and our social services team will work alongside the company's management.
Content prepared by the restructuring and insolvency department of ARST Avocats. Lead lawyer: Morgan Jamet, founding partner, Paris Bar. Rules verified against official sources (French Commercial Code, justice.fr). Updated October 2026.