Restructuring & insolvency lawyer — Shipyards, boatbuilders & marine industry sector

Mac Mahon Avocats is a Paris business law firm at 33 avenue Mac-Mahon, Paris 17. Its lawyers advise shipyards, boatbuilders & marine industry 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

Shipbuilding and ship repair yards, leisure boat and commercial vessel builders, marine equipment manufacturers and chandlers, marine engine makers, refit and maintenance companies, and boat dealers and distributors.

Sector context

Shipbuilding is characterised by long production cycles, working capital funded by staged customer instalments, and exposure to raw material and component prices. Yards frequently work on hulls that already belong to the customer once the first instalments are paid, or under a clause transferring title progressively, which changes what assets are available in insolvency. Order books, performance bonds and bank guarantees given to buyers, together with workforce know-how, are the main value drivers examined in a restructuring or acquisition.

Key legal issues

Ongoing construction contracts: characterisation of the contract, timing of transfer of title in the vessel under construction and the effects of continuing the contract (Art. L. 622-13 Commercial Code).
Customer instalments and guarantees: advance payment guarantees, bank bonds and refund clauses; leisure boat buyers are frequently consumers, calling for review of protective rules.
Security over vessels: ship mortgages, maritime liens and the yard's right of retention over a repaired vessel pending payment.
Suppliers and retention of title: engines, electronics and equipment delivered subject to retention of title (Art. L. 624-16 Commercial Code) and its effect on inventory.
Statutory and contractual warranties: latent defect liability, builder's warranties and post-sale liability, to be built into the scope of any acquisition.
Occupation of public property: slipways, dry docks and yards held under port authorisations, which are not freely transferable.
Employment and skills: retaining qualified teams during the observation period, information and consultation duties and AGS involvement.
Seasonality: deliveries and boat shows are concentrated in the year, which must be reflected in the procedural timetable.

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

Who owns a vessel under construction when the yard enters proceedings?

This depends on the characterisation of the contract and its title transfer provisions. Some contracts provide for progressive transfer as materials are incorporated or instalments paid; failing that, the vessel remains in the yard's estate until delivery. Contractual analysis is decisive for any ownership claim.

Can a yard retain a vessel left for repair?

A right of retention requires a certain, liquidated and due claim connected with the item retained. Its exercise during insolvency proceedings is governed by Book VI of the Commercial Code and reviewed with the officeholders.

Are customer instalments refunded?

Refund claims arising before the opening judgment must be filed as claims in the proceedings. Where advance payment guarantees or bank bonds exist, they may be called on their own terms, independently of the proceedings.

Can an order book be acquired?

The court may order the assignment of contracts necessary to preserve the business under a sale plan (Art. L. 642-7 Commercial Code). Feasibility depends on the stage of completion, funding for completion and the position of guarantee providers.

Contact

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