Privilege of New Money (Art. L. 611-11): Conditions, Ranking and Practice

Laurent Cazals, partner · Restructuring & Insolvency · Updated 1 October 2026

Restructuring · Turnaround financing

The new-money privilege (also called the conciliation privilege) is a payment priority granted by Article L. 611-11 of the French Commercial Code to those who provide new cash, or a new good or service, to a company in difficulty within the framework of a conciliation proceeding (conciliation) that results in a court-sanctioned agreement (accord homologué). If safeguard (sauvegarde), judicial reorganisation (redressement judiciaire) or judicial liquidation (liquidation judiciaire) is subsequently opened, these contributions are paid ahead of most other creditors, including secured creditors.

• Decisive condition: the conciliation agreement must be sanctioned (homologué) by the court; an agreement merely acknowledged (constaté) by the president of the court does not give rise to the privilege.
• Only genuinely fresh money counts: rescheduling or refinancing an existing debt does not create a privilege.
• Exclusion: capital contributions made by shareholders/members on a capital increase.
• Ranking: in judicial liquidation, the new-money privilege under Article L. 643-8 ranks 5th, after, notably, the "superprivilege" of employee wage claims (superprivilège des salaires) and the costs of justice (frais de justice).
• Protection within the plan: no debt write-down (remise) or deferral (délai) may be imposed on the creditor without its consent (Art. L. 626-20).
• Trade-off: sanctioning (homologation) is published; the conciliation loses part of its confidentiality as a result.
• Security interests preserved: security interests that genuinely secure repayment of a new cash advance survive the lapse of the agreement (Cass. com., 26 October 2022).

1. What the new-money privilege is for
2. Conditions for the privilege to apply
3. What is not covered
4. Ranking of payment depending on the proceeding
5. Additional protections
6. New money and post-money: two distinct regimes
7. Interaction with accelerated safeguard (sauvegarde accélérée)
8. Worked numerical example
9. Recent illustration: Maison Pommery & Associés
10. Points of attention by type of stakeholder
11. Frequently asked questions

1. What the new-money privilege is for

A company in difficulty often needs fresh cash to get through a critical period: financing working capital needs, completing an order, or paying a tax or social-security deadline. Lenders, however, are reluctant to finance a fragile company, because if insolvency proceedings are later opened, their claim risks being paid very late, or not at all.

The legislature addressed this obstacle in the Safeguard Act of 26 July 2005 (loi de sauvegarde), by creating a privilege attached to new contributions made during conciliation proceedings. The current text results from Ordinance No. 2021-1193 of 15 September 2021, in force since 1 October 2021 for proceedings opened from that date.

The mechanism is simple: if the conciliation results in a court-sanctioned agreement and the company subsequently becomes subject to insolvency proceedings, the provider of fresh cash is repaid as a priority, ahead of pre-existing creditors — whether unsecured or secured — in the order set by statute.

2. Conditions for the privilege to apply

Article L. 611-11 sets out four cumulative conditions.

Beneficiaries may be credit institutions, private debt or turnaround funds, suppliers, industrial partners, but also shareholders/members where they lend to the company outside a capital increase (for example, via a current-account advance).

In practice, it is recommended that the agreement precisely identify the beneficiaries, the amounts, and the nature of each contribution. The stakes are real: under Article L. 611-10, the sanctioning judgment may be appealed by the parties to the agreement in the event of a dispute relating to the privilege.

3. What is not covered

• Pre-existing facilities: the final paragraph of Article L. 611-11 provides that signatory creditors cannot benefit from the privilege, directly or indirectly, in respect of financing already advanced before the conciliation was opened. An existing debt that is rescheduled, consolidated or refinanced therefore does not become privileged. (In other words, security granted merely as a concession on old debt — a reschedule, standstill or refinancing — does not benefit from the privilege and, as discussed below, any related security lapses with the agreement; this is to be distinguished from security genuinely backing a new advance of fresh money, which survives.)
• Capital increases: the text expressly excludes contributions made by shareholders and members in that context. A shareholder/member seeking a repayment priority must therefore lend, rather than subscribe for shares.
• An agreement that is merely acknowledged (constaté): it remains confidential but does not give rise to the privilege.
• Ad hoc mandate (mandat ad hoc): Article L. 611-11 applies only to conciliation proceedings resulting in a sanctioned agreement. Financing granted under an ad hoc mandate does not benefit from it as such.
• Mere promises: the parliamentary materials for the 2005 Act used the expression "cash contribution" to refer to an actual, liquid contribution, not a promise to make funds available or a guarantee.

4. Ranking of payment depending on the proceeding

The privilege applies only if safeguard, judicial reorganisation or judicial liquidation is subsequently opened. As long as the agreement is being performed, the contributor is paid according to the agreed schedule.

In safeguard and judicial reorganisation proceedings

Article L. 611-11 refers to the ranking set out in Article L. 622-17, II. That provision governs the payment of claims arising after the opening judgment: they rank ahead of all other claims, whether secured or not, except for three categories, which take priority over them:

• the superprivilege of wage claims (Articles L. 3253-2, L. 3253-4 and L. 7313-8 of the Labour Code);
• costs of justice regularly arising after the opening judgment for the needs of the proceeding;
• claims secured by the conciliation privilege under Article L. 611-11.

In other words, the new-money contributor is paid before most pre-existing creditors and ahead of qualifying post-opening claims, including post-money contributors, subject to higher-ranking claims.

In judicial liquidation

Article L. 643-8 sets the order for distribution of the estate. The conciliation privilege ranks 5th, ahead of numerous post-opening claims and ahead of ordinary security interests. The post-money privilege (see below) ranks 9th.

5. Additional protections

No sacrifice can be imposed under the plan

Under Article L. 626-20, I, 3°, claims secured by the conciliation privilege cannot be subjected to debt write-downs or deferrals that their holders have not accepted in a safeguard or reorganisation plan. The contributor cannot therefore be forced by the court to accept a rescheduling.

A barrier against the hardening (suspect) period

Under Article L. 631-8, absent fraud, the date on which cessation of payments is deemed to have occurred cannot be set earlier than the final decision sanctioning the agreement. Payments, security interests and acts entered into under the sanctioned agreement therefore escape, in principle, the nullities applicable to the hardening period. This safeguard does not exist for an agreement that is merely acknowledged.

Security interests that survive the lapse of the agreement

The opening of insolvency proceedings automatically terminates the conciliation agreement. In a published decision, the Court of Cassation held that this lapse does not extinguish security interests genuinely securing repayment of a new cash advance; only the security interests attached to the deferrals and write-downs granted on pre-existing debts are called into question (Cass. com., 26 October 2022, No. 21-12.085, published in the Bulletin). In the case at hand, the lending bank was able to act against the director acting as guarantor despite the opening of judicial reorganisation proceedings. A financier can therefore combine the statutory privilege with its contractual security interests (guarantee, pledge, trust arrangement/fiducie) — but only to the extent that security secures the genuinely new advance; security granted merely in consideration of concessions on old debt does not benefit from this survival rule and lapses along with the agreement.

The trade-off: less confidentiality

Under Article L. 611-10, the sanctioning judgment is filed with the clerk's office, where any interested party may inspect it, and is subject to a publicity measure. The company's management must therefore weigh discretion (acknowledged agreement, without the privilege) against the security of fresh cash (sanctioned agreement, with the privilege). This trade-off depends on the amount at stake, the commercial sensitivity of the situation, and the requirements of the financiers.

6. New money and post-money: two distinct regimes

The Ordinance of 15 September 2021 added a second mechanism, the post-money privilege, which made permanent a measure introduced during the health crisis. It does not replace new money; it applies at a later stage in the company's life.

For a financier, the implication is clear: a contribution made earlier, under a sanctioned conciliation agreement, is better protected than a contribution made once insolvency proceedings have been opened.

7. Interaction with accelerated safeguard (sauvegarde accélérée)

Under Article L. 628-1, accelerated safeguard proceedings are opened at the request of a debtor already engaged in a conciliation proceeding, who demonstrates a draft plan likely to secure sufficiently broad support among the affected parties. Its accounts must be certified by a statutory auditor or prepared by a chartered accountant. A cessation of payments does not bar access to the proceeding if it has existed for no more than 45 days before the request to open the conciliation.

It is used in particular where amicable negotiation does not achieve unanimity, by allowing a plan to be adopted within classes of affected parties.

Two situations must be distinguished:

• if a sanctioned agreement was concluded before insolvency proceedings are opened, the contributions made under that agreement benefit from the new-money privilege;
• if the conciliation switches directly into accelerated safeguard without a sanctioned agreement, the new-money privilege does not apply; fresh cash contributed during the proceeding or under the plan instead falls under the post-money regime.

The timetable of the negotiation therefore has a direct bearing on the ranking of financiers. It is best settled at the very start of the conciliation, together with the conciliator and the main creditors. For an overview of the proceedings, see our comparison safeguard vs. judicial reorganisation.

8. Worked numerical example

Situation. An industrial SME obtains, in conciliation, a loan of €600,000 from a private debt fund to finance its working-capital needs. The agreement is sanctioned. Eighteen months later, despite the contribution, the company is placed into judicial liquidation. The distributable estate amounts to €1,200,000.

Reading. With the privilege, the fund recovers its entire contribution in full. Without sanctioning, its claim would have been unsecured: it would have been paid pro rata with other ordinary creditors, after secured and privileged creditors, i.e. in this example only a very small fraction of its amount.

Illustrative and simplified example: it does not reflect all the ranks set out in Article L. 643-8 (subsidies, rights of retention, real-property security interests, post-opening claims, etc.). Each distribution depends on the actual composition of the assets and liabilities.

9. Recent illustration: Maison Pommery & Associés

The mechanism is not reserved for SMEs. In early August 2026, the Reims Commercial Court sanctioned the conciliation agreement concluded by the Champagne group Maison Pommery & Associés (formerly Vranken-Pommery, listed on Euronext) and nine of its subsidiaries with their financial partners. According to information published by the company:

• the agreement provides for €42.8 million in new liquidity, to be made available from September 2026;
• this fresh cash is backed by a conciliation privilege and security interests over wine-growing assets (pledges, trust arrangements/fiducies);
• existing financing facilities are extended, with a moratorium on repayment of principal;
• the agreement runs until June 2027, with a possible extension until June 2028.

This matter brings together the three levers described above: sanctioning, the statutory privilege and contractual security interests, in exchange for the publicity of the agreement that a listed company must in any event accept.

Information drawn from the company's public financial communications (August 2026). This matter is cited for illustrative purposes only, based solely on that public information.

10. Points of attention by type of stakeholder

For company management

• Open conciliation proceedings while it is still possible: no cessation of payments for more than 45 days. Our cessation-of-payments simulator allows for an initial assessment.
• Anticipate the confidentiality/sanctioning trade-off with commercial partners.
• Verify that the contribution genuinely serves the continuation of the business, and document it.
• Assess the effect of the privilege on other creditors, whose support remains necessary.

For the bank, debt fund or turnaround fund

• Make disbursement conditional on sanctioning, or provide for a disbursement mechanism adapted to the timetable of the proceeding.
• Clearly separate, both in the agreement and in the cash flows, fresh cash from pre-existing facilities.
• Combine the privilege with contractual security interests — bearing in mind that only security backing the genuinely new advance survives the lapse of the agreement (Cass. com., 26 October 2022); security granted merely in consideration of concessions on old debt does not, and the privilege does not dispense with an overall ranking analysis.
• For funds, see also our page on investment funds and restructuring.

For the strategic supplier

• The privilege covers the price of new goods or services supplied under the agreement, not pre-existing outstanding balances.
• Have the relevant deliveries identified in the sanctioned agreement and keep separate invoicing.

For the shareholder/member

• Lend rather than subscribe for shares, if the goal is a repayment priority.
• Anticipate governance issues and conflicts of interest arising from a shareholder/member holding privileged creditor status.

11. Frequently Asked Questions

What is the new-money privilege? It is a payment priority provided for by Article L. 611-11 of the Commercial Code. It benefits persons who have contributed new cash, or supplied a new good or service, within the framework of a conciliation proceeding that resulted in a sanctioned agreement. If safeguard, judicial reorganisation or judicial liquidation is subsequently opened, these contributions are paid ahead of most other claims.

Does the privilege apply if the agreement is merely acknowledged? No. Only the sanctioned agreement referred to in Article L. 611-8, II gives rise to the privilege. An acknowledged agreement remains confidential but does not offer this priority.

Does a shareholder/member who subscribes to a capital increase benefit from it? No. The final paragraph of Article L. 611-11 excludes contributions made by shareholders and members in the context of a capital increase. The text does not exclude other cash contributions by a shareholder/member: a loan, for example via a current account, can therefore be covered if it meets the other conditions.

What is the ranking of the privilege in judicial liquidation? The 5th rank under Article L. 643-8, after, notably, the wage superprivilege and the costs of justice. Post-money ranks 9th.

What is the difference between new money and post-money? New money concerns contributions made under a sanctioned conciliation agreement, before any insolvency proceeding. Post-money concerns contributions made during safeguard or reorganisation proceedings, for the duration of the proceeding, or under the plan. New money ranks higher.

Can the plan impose deferrals on new-money creditors? No. Article L. 626-20 prohibits imposing write-downs or deferrals that have not been accepted on holders of the conciliation privilege.

Does sanctioning protect the agreement against the hardening (suspect) period? Yes, in principle. Absent fraud, the date of cessation of payments cannot be set earlier than the final decision sanctioning the agreement (Art. L. 631-8).

Does sanctioning cause a loss of confidentiality? Partly: under Article L. 611-10, the sanctioning judgment is filed with the clerk's office, open for inspection by any interested party, and is subject to a publicity measure. This is the trade-off for the security offered to providers of fresh cash.

Do security interests securing fresh cash survive insolvency proceedings? Yes. The opening of proceedings terminates the agreement, but the Court of Cassation has held that this lapse does not extinguish security interests securing repayment of a new cash advance (Cass. com., 26 October 2022, No. 21-12.085, published in the Bulletin).

Our Assistance

Our Assistance

Mac Mahon Avocats assists company management, financiers and suppliers in negotiating and drafting conciliation agreements: structuring the contribution, securing the privilege, applying for sanctioning, and then defending the ranking in the event of subsequent insolvency proceedings. These matters fall within our financial restructuring, ad hoc mandate and conciliation and insolvency proceedings practices, including for groups present in the OHADA zone.

Speak with a lawyer at the firm

Sources

• Commercial Code, Art. L. 611-11 (version in force since 1 October 2021)
• Commercial Code, Art. L. 622-17
• Commercial Code, Art. L. 626-10 and Art. L. 626-26
• Commercial Code, Art. L. 626-20
• Commercial Code, Art. L. 628-1
• Commercial Code, Art. L. 643-8
• Commercial Code, Art. L. 611-8 and L. 611-10; Art. L. 631-8
• Cass. com., 26 October 2022, No. 21-12.085, published in the Bulletin
• Maison Pommery & Associés, financial communications of August 2026 (sanctioning by the Reims Commercial Court)
• Ordinance No. 2021-1193 of 15 September 2021 amending Book VI of the Commercial Code