Mandat ad hoc: definition, procedure and role of the mandataire

The mandat ad hoc is a preventive and confidential procedure for companies in difficulty. It allows the director to obtain the help of a professional appointed by the court, before any cessation of payments. The president of the court appoints a mandataire ad hoc and sets the task. The aim is to negotiate discreetly with creditors and restore the situation. This page sets out its definition, steps, advantages and differences from conciliation. Every situation is different.

What is a mandat ad hoc in France?

A preventive and confidential procedure

The mandat ad hoc is one of the measures for preventing business difficulties. Article L611-3 of the Commercial Code allows the president of the court, at the debtor’s request, to appoint a mandataire ad hoc and determine the task. The debtor may propose the name of the mandataire. The procedure takes place away from the public eye.

This confidentiality is the core of the mechanism. The company keeps control of its image and its business relationships are preserved. No publicity announces the opening of the mandat. The director remains in charge of the company throughout the task. This discretion clearly distinguishes the mandat ad hoc from insolvency proceedings (procédures collectives), which are public by nature.

Action before cessation of payments

The mandat ad hoc comes into play before an open crisis. It is aimed at directors who see financial strain or difficulties with creditors, without yet being in cessation of payments. Acting early widens the range of solutions. The earlier the action, the more room for negotiation remains.

How does a mandat ad hoc work?

The director’s request

The procedure begins with a written request from the director. The director sends it to the president of the Commercial Court, or of the Judicial Court (tribunal judiciaire) depending on the business activity. The request sets out the difficulties encountered and the objective pursued. The director may suggest the name of a prospective mandataire.

Appointment of the mandataire ad hoc

The president of the court rules on the request. The president appoints the mandataire ad hoc and defines the purpose of the task. The task remains flexible: it adapts to the company’s situation. The judge also sets the terms of the mandataire’s remuneration, with the director’s agreement.

Diagnosis and negotiation

The mandataire ad hoc first carries out a diagnosis of the financial situation. The mandataire identifies the creditors concerned and the levers for recovery, then opens negotiations to obtain extra time, debt write-offs or rescheduling. The mandataire facilitates dialogue between the company and its partners. This work leads to tailored agreements, concluded in confidence.

Role and responsibilities of the mandataire ad hoc

The mandataire ad hoc has no management powers. The mandataire does not run the company and does not replace the director. The role is that of an independent facilitator, appointed for a specific task. The mandataire acts under the supervision of the president of the court who made the appointment.

The mandataire’s value lies in neutrality and experience of negotiations. The mandataire inspires confidence in creditors, which unblocks discussions that have sometimes stalled. The mandataire proposes realistic measures, without committing the company beyond what the director accepts. The task ends on expiry of its term, when the objective is achieved or, without delay, at the debtor’s request (Article R611-21 of the Commercial Code). Assistance from a lawyer helps make the agreements reached during the procedure legally sound.

Advantages of the mandat ad hoc

Confidentiality and protection of the company’s image

Confidentiality protects the company’s reputation. Suppliers, customers and employees are not informed of the process. Business continues without the negative signal that public proceedings would send. This climate preserves partners’ confidence.

Flexibility and speed

The mandat ad hoc adapts to each situation. Its duration and purpose are not fixed by law, but defined by the court. This flexibility allows solutions to be implemented quickly. The director keeps control of the company throughout the task. These strengths make it a valued crisis management tool.

Mandat ad hoc and other procedures

Mandat ad hoc vs conciliation

Conciliation shares the preventive logic of the mandat ad hoc, but follows a stricter framework. Article L611-4 of the Commercial Code reserves it for debtors who have not been in cessation of payments for more than forty-five days. Article L611-3 sets no condition of this kind for the mandat ad hoc. Cessation of payments does, however, require the debtor to request the opening of judicial reorganisation (redressement judiciaire) or judicial liquidation (liquidation judiciaire) within forty-five days, unless conciliation is requested within that period (Article L631-4). Conciliation also gives access to specific tools, such as court approval (homologation) of the agreement.

Mandat ad hoc vs insolvency proceedings

The mandat ad hoc differs fundamentally from judicial reorganisation and judicial liquidation. These insolvency proceedings require cessation of payments and are public. They partly or fully remove the director’s powers. The mandat ad hoc comes earlier and preserves the director’s management powers. If the difficulties worsen, a move to judicial reorganisation or judicial liquidation (in French) then becomes necessary.

Frequently asked questions

What is a mandat ad hoc?
It is a preventive and confidential procedure in which the president of the court, at the director’s request, appoints a mandataire to negotiate with creditors, under Article L611-3 of the Commercial Code.

Who can request a mandat ad hoc?
The company’s director, by a request to the president of the Commercial Court or Judicial Court, before cessation of payments.

Is the mandat ad hoc public?
No. The procedure is confidential. No publicity announces its opening, which preserves the company’s image.

What is the difference between a mandat ad hoc and conciliation?
Conciliation is reserved for debtors who have been in cessation of payments for forty-five days at most (Article L611-4). Article L611-3 does not set this condition for the mandat ad hoc, but cessation of payments requires the debtor to request the opening of insolvency proceedings within forty-five days, unless conciliation is requested (Article L631-4).

Does the director remain in charge of the company?
Yes. The mandataire ad hoc facilitates negotiations without management powers. The director continues to run the company.

Official sources

• Article L611-3 of the French Commercial Code (appointment of the mandataire ad hoc by the president of the court, task determined by the president, name proposed by the debtor) – Légifrance (in French)
• Article L611-4 of the French Commercial Code (conciliation reserved for debtors who have not been in cessation of payments for more than forty-five days) – Légifrance (in French)

This article presents the state of the law for general information purposes. It does not constitute legal advice. Every situation is different and deserves a dedicated analysis. Content compliant with the professional conduct rules of the legal profession.