Gazette du Palais – An Overview of the Conciliation Process in Practice

Conciliation is a preventive measure requested by a company facing difficulties from the president of the judicial court or the commercial court, who, after consulting with the company’s executive, may order the appointment of an administrator or judicial representative as a conciliator for a period of 4 months, which may be extended by one month.

This procedure has the advantage of being confidential and involving only those creditors selected by the company with a view to reaching an agreement that will resolve the financial difficulties it has encountered through the acceptance of payment deferrals, debt forgiveness, or injections of fresh capital.

With a success rate of around 75%, this procedure has been widely discussed by prominent legal scholars, who have either endorsed it or criticized it without even having tested it.

Critics have focused on the financial cost of this measure based on a few high-profile cases that account for less than 0.5% of all conciliations—a figure that should be put into perspective.

This article aims to show how, in practice, a conciliation is initiated, managed, and concluded, and at what cost.