Conciliation is a French insolvency-prevention procedure (Articles L. 611-4 et seq. of the French Commercial Code) available to companies experiencing financial difficulties but not yet in cessation de paiements (payment default). It is a confidential, pre-judicial procedure in which the court appoints a conciliateur to facilitate negotiations between the company and its main creditors, with the goal of reaching a protocole de conciliation — a negotiated restructuring plan. If agreed by all parties and homologated by the court, the plan grants the company a moratorium and restructuring path without the stigma of a formal insolvency procedure.

Conciliation offers several advantages over formal insolvency: confidentiality (the procedure is not public unless the protocol is homologated), flexibility (the restructuring terms are freely negotiated), speed (the procedure lasts a maximum of 5 months, extendable to a total of 5 months), and the "new money privilege" (Loi de Sauvegarde, Article L. 611-11) which grants super-senior ranking to creditors who provide new financing under a homologated protocol. This new money privilege is a powerful incentive for distressed lenders to participate in the conciliation.

In a Franco-Swiss distressed M&A context, a company in conciliation is frequently a target for distressed acquirers: the conciliation creates a structured negotiation framework, the conciliateur facilitates discussions with creditors, and the procedure can accommodate a controlled sale of assets or equity alongside the debt restructuring. Hectelion has advised in several distressed M&A situations involving companies in conciliation, providing valuation and structuring support.

At Hectelion, we advise on distressed M&A transactions involving French conciliation procedures in our M&A advisory and valuation mandates.