Restructuring & insolvency lawyer — Rental companies (cars, boats, aircraft) sector

Mac Mahon Avocats is a Paris business law firm at 33 avenue Mac-Mahon, Paris 17. Its lawyers advise rental companies (cars, boats, aircraft) 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

Short and long-term car rental companies, chauffeur-driven hire operators, commercial vehicle and plant hire companies, boat and yacht charter companies with or without skipper, charter bases, aircraft and helicopter lessors and operators, and fleet rental platforms.

Sector context

Rental models rely on debt-funded fleets — finance leases, operating leases, asset-backed loans — and on residual asset values that determine economic viability. A downturn in the used market, rising rates or a fall in seasonal demand simultaneously erodes earnings and lenders' collateral value. Rental firms also hold customer deposits and prepaid bookings and operate assets that are usually encumbered or owned by finance lessors, which limits the estate available in insolvency and puts negotiation with fleet financiers at the heart of any restructuring.

Key legal issues

Leased fleets: assets remain the lessor's property; continuing ongoing contracts requires payment of post-petition rentals (Art. L. 622-13 Commercial Code), failing which the assets may be repossessed.
Buy-back arrangements: manufacturer repurchase undertakings, residual value guarantees and the effect of proceedings on their performance.
Security and registration: pledges over vehicles, plant charges, enforceability of the lessor's rights and registration of agreements.
Deposits and prepaid bookings: sums received from customers before performance, characterisation of their claims and customer communication.
Insurance and claims: fleet cover, deductibles, handling of pending claims and treatment of insurance proceeds.
Fleet-specific regulation: chauffeur-driven hire, public passenger transport, aircraft registration and airworthiness (EU Regulations 965/2012 and 1321/2014), and safety and registration of commercial pleasure craft.
Sub-chartering and management for third parties: management mandates over yachts or aircraft owned by private owners, segregation of flows and return of assets.
Seasonality: concentration of marine and tourism revenue, the timetable of the observation period and working capital funding.

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

Can financiers repossess leased vehicles?

The lessor remains owner of the assets. During the observation period, continuation of the contract is a matter for the administrator and requires payment of post-petition rentals; where the contract is not continued or rentals are unpaid, repossession may be sought under Book VI of the Commercial Code.

What happens to customer deposits?

Refund claims arising before the opening judgment must be filed as claims. Services performed after the opening are governed by the regime for post-petition claims where they arise properly for the purposes of the proceedings.

Can a fleet be sold under a sale plan?

A sale plan covers the assets and contracts necessary to preserve the business. The actual scope depends on how much of the fleet is owned outright and on financiers agreeing to transfer the funding contracts.

Are boats or aircraft managed for third-party owners caught by the proceedings?

Assets belonging to third parties are not assets of the management company. Their return requires proof of ownership and settlement of any claims of the company for services rendered, particularly where a right of retention is asserted.

Contact

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