Conciliation proceedings

Request of the company manager

Craft firms, commercial companies and professional firms who suffer from actual or foreseeable economic or financial difficulties may apply for the conciliation proceedings.

These proceedings are available even to insolvent companies provided that their insolvency period does not exceed 45 days.

The proceedings are initiated by the company manager himself, who refers the matter to the president of the court. If the application is accepted, the latter appoints a conciliator who will negotiate with the main creditors of the company to reach at an amicable agreement (payment deadlines, rescheduling, or debt payments...) to resolve the company’s difficulties.

Discretion and speed

The conciliation proceedings have many advantages. First, during the proceedings, the manager remains in charge of his company. Secondly and most importantly, the proceedings are not advertised. As a result, only creditors involved in the negotiations are aware of the company’s difficulties. Finally, the process is fast. The conciliator has a maximum of 5 months to fulfill his mission.

Agreement under the supervision of the court

If the process is successful, an agreement is signed between the company and the creditors concerned. This agreement is ascertained by the court. It remains confidential. Under certain conditions, the business manager may request that the agreement be ratified by the court. This gives the agreement a greater legal force. The ratification judgment is then made public. But it merely mentions the guarantees established under the agreement without revealing its content.

Important: Once the agreement is reached, any lawsuit or legal action brought by the signatory creditors is discontinued or prohibited. 

The fate of debts during negotiations

Unlike receivership or liquidation proceedings, the opening of conciliation proceedings does not result in the suspension of court actions by the company’s creditors. During the negotiation phase, they can therefore act against the company to obtain payment of their debts. However, the business manager sued by a creditor may ask the court to grant him grace period. Better yet, on an exceptional basis for a period from May 22 to December 31, 2020, he may ask the court to prohibit a creditor from bringing a court action against him.