The cross-class cram down “à la française”
The French restructuring market is busy with several major companies under financial pressure. Some have already gone bankrupt (Go Sport, Camaïeu), others are currently negotiating with their creditors (Casino).
Orpea’s restructuring attracted a lot of attention because of the amount of the indebtedness at stake (~9.5bn €) and of the numerous legal issues it raised. That was the first opportunity to implement a so-called “cross-class cram-down” à la française in a large-scale restructuring, following the 2021 reform whereby this new restructuring tool was created.
As a first step, an agreement in principle was reached with a significant number of creditors (including most of the secured creditors) during conciliation proceedings. The conciliation proceedings were then converted into accelerated safeguard proceedings, and classes of affected parties were constituted to vote on the plan.
The Court adopted the plan on 24 July 2023. The need to impose a cross-class cram-down resulted from the fact that the required two-third majority had not been reached in four classes of unsecured creditors. Pursuant to the plan, the existing shareholders retained only 0,04 % of the equity and the whole unsecured debt (3.8bn €) was converted into equity.