Collateral Agreement In French

In order for a proposed plan to be adopted, it must be approved by creditors in each creditor committee and in the general meeting of bondholders, which represents two-thirds of the total outstanding liabilities of all creditors in those creditor committees and in the general meeting of bondholders. All creditors of each creditor committee or of the general meeting of bondholders shall vote with one vote on the basis of one euro, irrespective of the differences in ranking and security between the claims of those creditors and whether or not the voting creditor is a related entity of the borrower/issuer, provided that the proposed plan must take into account all priority agreements concluded before the opening of safeguard or reorganization proceedings. Contractual agreements relating to the exercise of votes in committee have recently been recognised under French law. According to the legislation adopted in 2014, each member of a creditor committee or of the general meeting of bondholders must, where applicable, inform the administrator appointed by the court of the existence of an agreement concerning (i) the exercise of his vote or (ii) the full or full payment of his claim by a third party, as well as a subordination agreement. The administrator appointed by the court would then submit a proposal for the calculation of his voting rights to the competent creditor committee/general meeting of the bondholders. In the event of disagreement, the President of the Commercial Court may rule in urgent proceedings at the request of the creditor or the administrator appointed by the court. As a result, it is now more likely that voting arrangements, as defined in the inter-creditor agreements that govern the respective rights of creditors in the context of a given financing, will be recognised under a French safeguard clause procedure. Nevertheless, the practices described above, the limitation of the possibility for sponsors or group members to become creditors of the issuer/borrower or to require certain intra-group loans in the form of bonds, are still relevant on the French market. Insolvency law considerations may also influence the structuring of financing by French borrowers/issuers. In general, in the case of legal protection (safeguard) or French re-education proceedings initiated against a French company, the creditors of the company concerned are grouped by the administrator appointed by the courts (on the basis of the claims resulting from the stay of commencement of proceedings) in the following creditor committees and bodies: the granting of guarantees by French subsidiaries on the debts of their French parent companies/sisters raises serious legal questions. First, under the French company Corporate Benefit Rules, a company is required to use its assets and credit exclusively to promote its own corporate objectives and for its own benefit (or that of its subsidiaries).

The grant by a French subsidiary of an upstream/cross-stream guarantee would be contrary to that rule if that subsidiary is unable to demonstrate that it is an advantage of the guarantee. The president, directors and other officers may be subject to civil sanctions (for mismanagement) or even criminal sanctions (abuse of the company`s assets or the company`s credit or infidelity) if these requirements are not met, and the guarantee or security may be lifted by the French courts. – Enforcement under Security Interests (Jersey) Law 2012 – Newsletter – International Law Office – Snapshot: Real Estate Financing in Thailand – Lexology In order to minimise the risk that an upstream guarantee violates this rule, the market practice is to contractually limit the guarantee obligations of the French subsidiary to an amount corresponding to the amount of the proceeds of the secured parent/sister debt (whether under a mechanism or obligations) that is, directly or indirectly, lent to these guarantors by the parent/sister borrower in the context of intra-group loans, and which is in arrears from time to time…