Kem One’s restructuring has brought back distressed disposals to France paving the way for alternatives to the French in-court processes.
In September, 9fin was on the ground in Paris. As we moved between restructuring conferences and meetings with insolvency lawyers, advisors and distressed investors, we heard the same theme again and again: the tool that France’s market has long kept at arm’s length is quietly resurfacing.
Before Kem One, the last large French distressed disposal insources’ memory was in 2023 for media company Technicolor Creative Solutions. Now the market is wondering whether this return means distressed disposals are here to stay.
Mechanics of distressed disposal
France's restructuring toolkit has long been dominated by its own court-supervised processes, namely conciliation, safeguard and accelerated safeguard, built around a legal culture that prizes debtor protection and judicial oversight.
However, sponsors are seeking alternatives to the French safeguard process that allow for more creative deals, Paris sources told 9fin. Distressed disposals offer a way to avoid the process altogether.
Distressed disposalis an English law creature: a contractual restructuring mechanism under an intercreditor agreement (ICA) that allows a security agent to sell assets or shares, release debt and clear liabilities...
