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FORCED TAKE-OVER OF A COMPETITOR
Monday, September 12, 2016

The law regarding the continuity of enterprises (LCE) of 31 January 2009 (as amended by the Act of 27 May 2013) provides, in Article 59 paragraph 2 thereof, the possibility for any interested person to request the Commercial Court the forcible transfer a company in difficulty.

The goal for this interested person is to acquire a company, possibly competing, facing bankruptcy, without supporting fiscal and social liabilities thereof.

Indeed, social and tax provisions applicable in case of transfer, and establishing in particular the principle of joint liability between the transferor and the transferee, shall not apply in the case of transfer regulated by Article 59 of the LCE.

It is an unknown opportunity and poorly applied by practitioners, despite the many benefits of this procedure, besides the above tax and social benefits.

Specifically, a company (or individual) who wish to acquire a company in difficulty to revive its business or develop so asks the Commercial Court through a citation or request. It has to demonstrate the difficulties faced by the company "target", generally by depositing a recent accounts of the target company.

If the Court finds that the applicant's proposed takeover holds up, it will appoint a court representative who will be responsible for organizing the transfer of the target company.

However, it should not be forgotten that the judicial representative is obliged to seek other buyers, and therefore other potential entrepreneurs will solicit the purchase of the company, along with the initiator of the procedure.

Each buyer will submit a takeover offer to the judicial representative, who will submit them to the Tribunal.

It appears from practice that, generally, the initiator of proceedings has the most interesting offers and the most viable solution, and is often assigned the company and its assets at the proposed price.

Of course, the acquisition of such a company can be in various forms; with staff or without much thereof, with any building or not, with the production tool or not, ...

You want to acquire a company with difficulties, and at a reasonable price?

Our teams are at your side throughout the procedure, from its introduction before the Court until your entry in the new entity, passing through the drafting of the offer and its terms.