Article 2 of Law no. 2014-1 of 2 January 2014 enabled the French government to simplify and secure the legislation relating to companies in difficulty.

Following consultation with practitioners, the French government issued an Ordonnance (the Order) on 12 March 2014 which was published in the Official Journal on Friday 14 March. The Order takes effect on 1 July 2014 and will apply to pre insolvency and insolvency proceedings opened after that date; it will not apply to any such proceedings which are in progress on that date.

The purpose of the Order is to facilitate the anticipation and treatment of financial difficulties and to reinforce and improve the efficiency of the existing pre insolvency and post-insolvency procedures so as to ensure more security, simplicity and efficiency in dealing with companies encountering actual or anticipated financial difficulties.

The changes when effective on 1 July 2014 will have important consequences for creditors and other stakeholders involved in work-outs and restructurings in France. They introduce new tools to facilitate the implementation of restructuring plans more efficiently and improve the creditors' rights in safeguard and in administration as regards formulation of a restructuring plan.