The safeguard procedure (procédure de sauvegarde) is a preventive insolvency framework allowing French companies facing serious difficulties — but not yet in cessation of payments — to obtain judicial protection and restructure their debt under court supervision. Initiated voluntarily by the company's management, it is the least stigmatising of French insolvency procedures. During the observation period, automatic stay on creditor enforcement applies and a safeguard plan (rescheduling debts over up to 10 years) is negotiated. For buyers, acquiring a company in safeguard provides a clear debt restructuring framework and reduced competition from other bidders.

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Example: a French manufacturing SME with CHF 2.8 million of near-maturity debt opens safeguard proceedings at the advice of its financial advisor. The resulting plan reschedules CHF 2.0 million of bank debt over 8 years and obtains a 24-month moratorium on supplier payables — preserving operational continuity and workforce. A private equity buyer acquires 70% of the company's capital during the safeguard at a distressed valuation, co-financing the plan while benefiting from the protected restructuring environment.

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Hectelion advises on safeguard procedure investments in French Distressed M&A contexts, providing rapid due diligence and valuation under judicial supervision constraints.