Restructuring & insolvency lawyer — Education & professional training sector

Mac Mahon Avocats is a Paris business law firm at 33 avenue Mac-Mahon, Paris 17. Its lawyers advise education & professional training businesses on prevention of difficulties, out-of-court procedures, formal insolvency proceedings and distressed disposals under French law. This page sets out the applicable legal framework; it does not constitute legal advice.

Sector scope

Private education establishments, higher education schools, professional training organisations and apprentice training centres.

Sector context

Funding largely comes from pooled and public schemes, with a lag between the teaching commitment and cash collection. Difficulties arising mid-year raise the question of continuity of tuition for learners.

Key legal issues

Qualiopi certification, funding conditions and oversight of training bodies
Continuity of teaching and the treatment of apprenticeship contracts
Receivables from skills operators and conditional subsidies
Tuition fees collected in advance and the commitment to deliver the course
Leases of teaching premises and the academic calendar

How a matter is handled

Diagnosis: review of available cash, due and payable liabilities, tax and social security instalments and existing security, in order to establish whether cessation of payments is characterised (Art. L. 631-1 Commercial Code).
Choice of procedure: arbitration between confidential out-of-court tools (ad hoc mandate, conciliation) and formal proceedings, in light of the sector's own timetable.
Negotiation: discussions with banks, strategic suppliers, the AGS wage guarantee scheme, the tax authorities and URSSAF, and where relevant before the CCSF.
Implementation: preparation of the filing, representation before the commercial courts, monitoring of the observation period, and preparation of the plan or of the sale.

French procedures at a glance

Procedure	Entry condition	Duration	Legal basis
Ad hoc mandate	No cessation of payments	Set by the court president, renewable	Art. L. 611-3 Commercial Code
Conciliation	Actual or foreseeable difficulties; cessation of payments for 45 days at most	4 months + 1 month	Arts. L. 611-4 to L. 611-16
Safeguard	Insurmountable difficulties, no cessation of payments	Observation period 6 months, extendable to 12	Art. L. 620-1 et seq.
Rehabilitation	Cessation of payments, recovery possible	Observation period up to 18 months	Art. L. 631-1 et seq.
Liquidation	Cessation of payments, recovery manifestly impossible	Variable; business continuation 3 months, renewable	Art. L. 640-1 et seq.

A declaration of cessation of payments must be filed within 45 days of that state arising, unless a conciliation request is filed within the same period (Art. L. 631-4 of the French Commercial Code).

Frequently asked questions

When must cessation of payments be declared?

Within 45 days of the state of cessation of payments arising — defined as the inability to meet due liabilities with available assets (Art. L. 631-1) — unless a conciliation request is filed within the same period (Art. L. 631-4 of the French Commercial Code).

Are out-of-court procedures confidential?

Yes. Ad hoc mandate and conciliation are subject to a confidentiality duty and the appointing order is not published. Only the judgment approving a conciliation agreement is made public.

Which court has jurisdiction?

The commercial court of the registered office for traders and commercial companies, or the economic activities court or judicial court depending on the nature of the activity (Art. R. 600-1 of the French Commercial Code).

Can a business be acquired during proceedings?

The court may adopt a sale plan covering all or part of the business where the statutory conditions are met, designating the contracts necessary to the continuation of the business (Arts. L. 642-1 and L. 642-7 of the French Commercial Code).

Contact

Phone: +33 1 45 03 20 20
Email: accueil@macmahon-avocats.fr
Address: 33 avenue Mac-Mahon, 75017 Paris, France