The French Wage Guarantee Association (AGS — Association pour la Gestion du régime de garantie des créances des Salariés) guarantees payment of employee wages, notice pay, holiday pay and severance entitlements in the event of employer insolvency — up to defined ceilings. In Distressed M&A acquisition processes, AGS is an important stakeholder: it advances wage claims on behalf of insolvent employers and becomes a preferred creditor entitled to reimbursement from the assets of the insolvent estate. Understanding AGS exposure and reimbursement priority is essential for acquirers in French judicial reorganisation disposal plan processes.

Example: in a French judicial reorganisation, AGS advances CHF 380,000 of employee wage claims during the observation period. In the disposal plan, the acquiring company takes on 85 of 120 employees. AGS's CHF 380,000 claim — as a preferred creditor — must be satisfied before unsecured creditors receive any distribution from the disposal proceeds, directly reducing the net available to ordinary creditors.

Hectelion maps AGS claims and their creditor priority in every French distressed acquisition due diligence to ensure accurate creditor hierarchy modelling.