The Sapin II Act amended the regime governing directors' liability in an insolvency scenario in order to encourage the recovery of honest directors of failed businesses. The Commercial Code now states that mere negligence is not a form of mismanagement that can serve as the basis of an action by the court-appointed liquidator against the director of a company in liquidation proceedings.
Parliament recently adopted the Sapin II Act, which authorises the government to make decisions regarding legislative matters, including with regard to clarifying and modernising the status of security agents and their role in restructurings. This is another step towards making French law more attractive for investors. The resulting reform will be welcomed by market players, as the status of security agents, which was recognised by French law in 2007, has raised more questions than it has solved.
It might appear reasonable to assume that if adequate information is given to the purchaser of a distressed business, the seller will incur no risk if the purchaser fails to resolve the business difficulties and eventually files for insolvency. However, this assumption is misleading, since case law regularly shows that sales of distressed businesses may carry high risks for sellers if the takeover fails and the transferred business is eventually the subject of insolvency proceedings.
The Supreme Court recent ruled that the confidentiality of out-of-court ad hoc mandates and conciliations prevails over the freedom of the press. The court held that the statutory confidentiality of out-of-court ad hoc restructuring processes is designed to protect the rights and freedoms of debtor companies and is therefore a necessary restriction of the press's freedom of expression, unless the information is of general public interest.