Pre-pack sale lawyer in Paris: a confidential takeover before opening.

A pre-pack sale is a sale of a business prepared during an amicable procedure and completed in collective insolvency proceedings opened afterwards. The conciliator may be instructed, at the debtor's request and after hearing the participating creditors, to organise the partial or total sale of the business, which may then be carried out in safeguard, judicial reorganisation or judicial liquidation proceedings (Article L. 611-7 of the French Commercial Code). The ad hoc agent may be given a comparable mission, since the president of the court freely determines its purpose (Article L. 611-3 of the Commercial Code).

The second stage takes place before the court. Where the offers gathered during the amicable phase meet the legal conditions and are satisfactory, the court may decide not to open a new period for submitting offers (Article L. 642-2 of the Commercial Code). It then sets an examination hearing, and other candidates may still come forward up to eight days before it (Article R. 642-1 of the Commercial Code). The advantage of the method lies in speed: the takeover takes place before the collective proceedings have damaged the customer base, the suppliers and the teams. The firm first checks whether this timetable is compatible with the business's actual cash position.

Both routes are covered by Article L. 642-2 of the Commercial Code, which takes into account the offers made through the steps taken by the ad hoc agent as well as by the conciliator (Article L. 642-2 of the Commercial Code). The choice depends chiefly on the cash position and the degree of urgency. Conciliation is opened for four months at most, extendable by reasoned decision provided the total duration does not exceed five months, except where it is prolonged until the decision when a request for recording or approval was made in time (Article L. 611-6 of the Commercial Code). This time frame imposes a tight timetable, but it matches the pace of a sale process.

The ad hoc mandate has no equally strict legal duration and its mission is set by the president of the court (Article L. 611-3 of the Commercial Code). It is better suited to a less pressing situation, or to a preparatory search before a conciliation. Conciliation, by contrast, offers an express provision on the sale mission (Article L. 611-7 of the Commercial Code) and makes it possible to apply for grace periods against a creditor who pursues enforcement during the negotiation. In both cases, the agent or conciliator must not have received remuneration from the debtor or a creditor in the preceding twenty-four months, subject to statutory exceptions (Article L. 611-13 of the Commercial Code). The firm compares these parameters with the date of cessation of payments before drafting the application.

Yes, within a precise limit. Conciliation remains open to debtors that have not been in cessation of payments for more than forty-five days (Article L. 611-4 of the Commercial Code). Beyond that, conciliation can no longer be requested and the sale is prepared within the collective proceedings themselves, in principle within the period for submitting offers set by the court. The date of cessation of payments therefore becomes the first fact to establish, together with the documents that support it.

Where the conciliation produces an offer and cessation of payments is established, the debtor applies for the opening of judicial reorganisation or judicial liquidation. The commercial court of Aix-en-Provence opened a judicial reorganisation, noting that the conciliator's mission was to organise a sale and holding that, in order “to preserve the value of the business, the jobs and the activity, a rapid sale is necessary” (our translation) (TC Aix-en-Provence, 3 August 2026, No. 2026010335). In the same judgment it set the date for examining the offers. This decision illustrates the sequence sought, but each court assesses the situation and the quality of the steps taken. The firm helps to reconstruct the chronology and to present the court with a coherent file from the time of the declaration.

Anyone called to the conciliation procedure or the ad hoc mandate, or who learns of it through their duties, is bound by confidentiality (Article L. 611-15 of the Commercial Code). The debtor is not required to inform the social and economic committee of the appointment of an ad hoc agent (Article L. 611-3 of the Commercial Code). This discretion protects the value of the business during the search: it limits the spread of news of the difficulties, while leaving room for the exchanges that are necessary with creditors, counterparties and candidates.

This protection has limits that need to be managed. Prospective buyers are not always bound by the text, which justifies a written confidentiality undertaking before any sensitive data is shared. The firm can draft that undertaking, define the information disclosed in stages and trace access. Confidentiality then gives way before the court: where the mission was to organise a sale, the ad hoc agent or the conciliator reports on the steps taken to receive offers, notwithstanding Article L. 611-15 (Article L. 642-2 of the Commercial Code). The conciliator's report must therefore be readable by the court and the prosecution service without difficulty, which presupposes a documented search from the outset.

It may, but is not obliged to. Article L. 642-2 allows the court not to set a new deadline for submissions where the offers gathered by the ad hoc agent or the conciliator meet the legal conditions and are satisfactory, after hearing the public prosecutor (Article L. 642-2 of the Commercial Code). The judge must still satisfy themselves that, given the nature of the business, those steps gave sufficient publicity to the preparation of the sale (Article R. 642-40 of the Commercial Code).

The court then sets the date of the examination hearing and other offers may reach the administrator or the liquidator up to eight days before that date (Article R. 642-1 of the Commercial Code). Competition is therefore not removed, only compressed in time. Conversely, an isolated offer whose price appears unrelated to the value of the assets exposes the process to a call for offers. The commercial court of Dijon, faced with a proposal of 15,000 euros when the inventory valued the tangible assets alone far higher, appointed an administrator and ordered a call for offers (TC Dijon, 19 May 2026, No. 2026002444). That decision, unfavourable to the author of the offer, shows that speed does not excuse a defensible price. The firm checks the consistency between the offer and the valuations available.

No, in principle. The offer may be neither amended, except in a way more favourable to the objectives of the sale, nor withdrawn, and it binds its author until the court's decision adopting the plan; in the event of an appeal, only the transferee remains bound (Article L. 642-2 of the Commercial Code). The commercial court of Angers, opening a judicial reorganisation to carry out a pre-pack sale, recalled that the offers gathered by the conciliator are subject to this rule and set the timetable for improving the offers (TC Angers, 7 October 2026, No. 2026011752).

Permitted amendments must observe a deadline: none may be made less than two business days before the hearing to examine the offers, on pain of inadmissibility (Article R. 642-1 of the Commercial Code). The author of the offer also certifies that it is not subject to the disqualifications of Article L. 642-3 and attaches, where it is required to prepare them, its annual accounts for the last three financial years and its forecast accounts. For the candidate, this means that the offer submitted during the conciliation must already be financed and quantified with caution. Conditions precedent, guarantees and the right of substitution must be written precisely, because they bind their author before the court. The firm reviews the offer before it is filed and flags commitments whose scope should be reduced.

For the director, the principle is prohibition. Neither the debtor, nor the de jure or de facto directors, nor their relatives or in-laws up to the second degree, nor the supervisors may submit an offer, directly or through an intermediary; the court may nevertheless authorise a sale to a director or a relative, on the application of the public prosecutor, by a specially reasoned judgment after seeking the supervisors' opinion, but never to the debtor or the supervisors (Article L. 642-3 of the Commercial Code). In safeguard proceedings, the derogation follows the same conditions and exclusions, after hearing the public prosecutor (Article L. 626-1 of the Commercial Code).

The economic activities court of Paris used this derogation in favour of former directors, noting that it “decides to authorise the sale in order to avoid the destructive consequences of a liquidation that would be manifestly less favourable” (our translation) (TAE Paris, ch. 2-2, 7 July 2026, No. 2026045334). The Paris court of appeal, by contrast, held that “it follows from the spirit of this text that the conflict of interest, from which the prohibition derives, may also exist with the former director” (our translation) (CA Paris, pôle 5 ch. 9, 12 December 2024, No. 24/10762), for an offer of eleven euros for two patents sold separately, outside a sale plan. For its part, the Court of Cassation holds that former status as de jure director is not enough, absent fraud, to bar the offer (Cass. com., 23 September 2014, No. 13-19.713), which does not rule out examining whether de facto management exists. A mere shareholder, who is neither a director nor an intermediary, is not covered. The firm examines the candidate's status and, if necessary, prepares the request to the prosecution service.

The court selects the offer that most durably secures the employment attached to the business sold, payment of the creditors and the best guarantees of performance (Article L. 642-5 of the Commercial Code). Where the plan provides for redundancies on economic grounds, it may be adopted only after the consultation required by the Labour Code, and the opinion of the social and economic committee is given no later than the business day before the hearing. The plan specifies the redundancies that take place within the month following the judgment.

The contracts of employees whose jobs are maintained are transferred to the transferee designated by the judgment. The employment chamber of the Court of Cassation draws a clear consequence in the event of unauthorised substitution: “the employment contracts of the employees of the business sold whose jobs are maintained by the plan are automatically transferred to the transferee” (our translation) (Cass. soc., 31 January 2024, No. 22-10.276). Any substitution must indeed be authorised by the court in the judgment adopting the plan (Article L. 642-9 of the Commercial Code). For the buyer, the company that will carry the business must therefore be named in the offer, with an express right of substitution. The firm checks these provisions and the accrued rights taken over before the hearing.

The court determines the leasing, hire or supply contracts for goods or services necessary to keep the business going, in light of the counterparties' submissions; the judgment adopting the plan carries the assignment of those contracts, which must be performed on the terms in force on the day the proceedings opened (Article L. 642-7 of the Commercial Code). Any clause requiring the assignee of a lease to be jointly liable with the assignor is deemed unwritten.

The same provision allows the court, after hearing or summoning the landlord, to authorise the buyer to add related or complementary activities to those provided for in the commercial lease. On assignment of a leasing agreement, the purchase option may be exercised only after payment of the sums remaining due, up to the value of the asset fixed by agreement or by the court. The pre-pack makes it possible to prepare these points during the conciliation: list of essential contracts, exchanges with the main counterparties, identification of the contracts the buyer refuses. The counterparty whose contract is assigned may appeal only against the part of the judgment that carries that assignment (Article L. 661-6 of the Commercial Code). The firm helps the director and the candidate settle a realistic list before the offer is filed.

For assets subject to a specific security interest, the court allocates to each a share of the price, the full payment of which discharges the registrations (Article L. 642-12 of the Commercial Code). The Court of Cassation recalls that “the court adopting the sale plan must determine the share of the sale price allocated to assets subject to a special preferential right, a pledge, a lien or a mortgage” (our translation) (Cass. com., 14 June 2023, No. 21-15.864), the omission having no consequence where the sale covers only the business that was pledged.

The burden of specific security interests in rem securing a loan granted to finance the asset sold passes to the transferee, who pays the creditor that duly declared its claim the instalments falling due from the transfer of ownership, unless otherwise agreed; in its wording in force since 1 October 2021, the text adds that the debtor is released from those instalments (Article L. 642-12 of the Commercial Code). Under the earlier wording, the Court of Cassation held that this transfer “does not amount to novation by substitution of debtor” and that the creditor “may exercise this right against the defaulting transferee, within the limit of the instalments unpaid after the sale” (our translation) (Cass. com., 20 March 2019, No. 17-29.009). That outcome, unfavourable to the transferee, rested on the debtor's debt remaining in place. The author of the offer who has substituted a company does not thereby guarantee its payment, since “it does not guarantee to the creditor performance of the statutory obligation on the transferee to pay the instalments of the transferred loan, unless it has given a personal undertaking” (our translation) (Cass. com., 30 January 2019, No. 17-15.036). The firm quantifies these burdens before the offer.

The avenues of challenge are deliberately limited. An appeal against the judgment adopting or rejecting the sale plan is open only to the debtor, the public prosecutor, the transferee where the plan imposes burdens on it other than its commitments, and the counterparty solely in respect of the assignment of its contract (Article L. 661-6 of the Commercial Code). Third-party opposition and appeal to the Court of Cassation are barred, except for an appeal by the public prosecutor, the Court of Cassation reserving only the case of excess of power (Article L. 661-7 of the Commercial Code). The debtor itself must show an interest: the Court of Cassation states that “although the debtor has standing to appeal against the judgment adopting the sale plan, it must also show a personal interest in pursuing that avenue of appeal” (our translation) (Cass. com., 23 October 2019, No. 18-21.125), an outcome unfavourable to a debtor whose appeal defended only the interests of its director-guarantor and of an unsuccessful candidate.

A shareholder who contests a pre-pack runs into the same limits. The Paris court of appeal declared inadmissible the third-party opposition of a shareholder excluded by a pre-pack, holding that “a shareholder is in principle barred from bringing third-party opposition against the judgment adopting the sale plan since it is deemed to be represented in the proceedings by the debtor company, save in cases of fraud” (our translation) (CA Paris, pôle 5 ch. 8, 11 February 2025, No. 24/16960). The court added that third-party opposition is admissible only if an excess of power by the court is shown, which a failure to give reasons does not constitute. Its submissions must therefore be made before the judgment. The firm assesses that window as soon as the plan is announced.

Pre-pack practice often leads to a proposal that the conciliator, who knows the business and the candidates, be appointed administrator after opening. The Commercial Code allows this, but with a check: where proceedings are opened against a debtor that has had an ad hoc mandate or a conciliation in the preceding eighteen months, the public prosecutor may object to the ad hoc agent or the conciliator being appointed administrator or creditors' representative (Article L. 621-4 of the Commercial Code). The debtor may put forward the name of one or more administrators.

In judicial reorganisation, a court that considers a sale feasible appoints an administrator, if one has not already been appointed, to prepare and carry out the sale (Article L. 631-21-1 of the Commercial Code). Third-party offers may be submitted to the administrator from the opening (Article L. 631-13 of the Commercial Code). In the case decided by the Paris court of appeal in February 2025, the judgment records, in its summary of the grounds, that the same firm had acted as conciliator and then as administrator, and the court declared inadmissible the third-party opposition directed against the plan (CA Paris, pôle 5 ch. 8, 11 February 2025, No. 24/16960). Continuity of the office-holders speeds up the hearing, but it makes the quality of the search carried out during the conciliation more visible. The firm prepares the material that will allow the prosecution service to assess that appointment.

Directive (EU) 2026/799 of 30 March 2026 harmonises certain aspects of insolvency law. Its Title IV sets up a pre-negotiated sale procedure in two phases: a preparation phase intended to find a purchaser, then a liquidation phase that approves and carries out the sale. Member States must make it available at least for debtors likely to become insolvent (Article 21).

The directive requires the sale process in the preparation phase to be competitive, transparent, fair and consistent with market standards, under the supervision of a monitor (Article 24). Member States have until 22 January 2029 to adopt the necessary provisions (Article 55). In their version in force on 1 November 2026, as checked on Légifrance, Articles L. 611-7, L. 642-2 and R. 642-40 of the Commercial Code remain the provisions that govern the pre-pack sale. The European text nevertheless sheds light on the transparency requirements that the courts already examine. A documented search, open to several candidates and traced by the conciliator, is consistent with those objectives, without prejudging the precise requirements that the transposing law will set. The firm is following the transposition and will adapt how files are prepared once the new rules are adopted and in force.