Opening a conciliation procedure — negotiating your debts with a conciliator

Two cumulative conditions. The business faces a legal difficulty — a dispute between partners, for instance —, an economic one — the loss of a contract — or a financial one — a customer's non-payment —, that difficulty being existing or foreseeable. And it is not in cessation of payments, or has been for less than 45 days. The procedure does not apply to farmers, who come under the règlement amiable.

The economic, financial and social situation of the business, the forecast funding plan and profit and loss account, the funding needs and, where applicable, the means of meeting them, the recovery measures contemplated, and the payment extensions or debt waivers that would make them possible. Where the business is in cessation of payments, the date must be stated.

The Kbis extract or the certificate of registration with the national business register; the statement of receivables and debts with a schedule and the list of main creditors; the statement of assets and liabilities in security interests; the statement of assets and liabilities in off-balance-sheet commitments, for example leasing transactions and waivers granted by creditors; the annual accounts, funding table, statement of realisable and available assets — trading stock excluded — and due liabilities for the last 3 financial years, where prepared; the sworn statement certifying the absence of any conciliation procedure in the preceding 3 months; and the statement indicating, where necessary, that a third party bears the costs of the procedure. For a professional activity, the professional body the business belongs to must be added.

The conciliator is appointed for 4 months at most, extendable by one month at the conciliator's request — only they may seek it — without the total exceeding 5 months.

In part. From the moment conciliation is triggered, creditors may no longer apply for the business's judicial reorganisation or winding-up. And during the negotiation, the business may obtain payment extensions from the judge, up to 2 years, against a creditor that has sued it for payment.

Recording is made by order of the president, at the request of the creditors and the business: it gives the agreement enforceable force, and the agreement is not published and stays confidential. Approval is a judgment, which only the head of the business may request, on three conditions: the business is not in cessation of payments or the agreement ends it, the terms of the agreement ensure the continuation of the activity, and the agreement preserves the interests of non-signatory creditors. The existence of an approved agreement is published at the court registry, though not its content, and the works council must be informed.

Under an approved agreement, creditors who have provided fresh money, or supplied a new asset or service, enjoy a payment priority over other creditors where collective proceedings are later opened. They must then notify the supervising judge; they cannot have payment extensions imposed on them, and are paid after the employees and after certain legal costs.

Failure results either from the impossibility of reaching an agreement — the conciliator then reports to the president, who ends the mission and the procedure — or from non-performance of the undertakings, in which case the president, seised by a party, may terminate the agreement. The extensions, debt waivers and security interests granted under the agreement disappear. The business may use an accelerated safeguard procedure where the failure is due to certain creditors' refusal, or ordinary safeguard; if it is in cessation of payments, it must use judicial reorganisation or winding-up.