French Monetary and Financial Code
In forceI. - When it considers that the measures that may be taken pursuant to II of Article L. 612-33 are not sufficient to remedy the situation of a credit institution, an investment firm referred to in 2° of I of Article L. 613-34 or a finance company referred to in II of Article L. 613-34, the Autorité de contrôle prudentiel et de résolution may appoint, for a period it shall determine, one or more temporary directors, whether natural persons or legal entities, to assist or replace the managers referred to in Article L. 511-13 or 4 of Article L. 532-2 and the members of the board of directors, the supervisory board, any other body exercising equivalent functions in these undertakings or a central body referred to in Article L. 511-30.
The Autorité de contrôle prudentiel et de résolution may appoint any person as a temporary administrator, including a person registered on the list referred to in Articles L. 811-2 or L. 812-2 of the Commercial Code.
Such persons are personally responsible for the tasks involved in carrying out their duties as temporary administrator. When required for the proper performance of his duties and with the agreement of the Supervisory Board, he may be assisted by third parties acting on his behalf and under his responsibility.
II. - When a temporary administrator is appointed to replace the persons mentioned in I, the powers of administration, management and representation of the legal entity in question are transferred to him by operation of law for the duration of his term of office. His appointment is made public.
Where a temporary administrator is appointed to assist the persons mentioned in I, his mandate shall determine the scope of his powers, which may extend to those mentioned in the first paragraph and, where applicable, shall define the cases in which the directors are obliged to consult him or to obtain his prior agreement.
The Autorité de Contrôle Prudentiel et de Résolution shall, where applicable, define the cases in which the temporary administrator is obliged to consult it or to obtain its prior consent.
The convening of a general meeting by the temporary administrator and the drawing up of the agenda are subject to the prior approval of the Autorité de contrôle prudentiel et de résolution.
The Autorité de contrôle prudentiel et de résolution may require the temporary administrator to prepare reports on the financial situation of the credit institutions, investment firms or finance companies referred to in I and on the measures it has taken in respect of them, and to submit them to it at intervals it determines.
III. - The term of office of the temporary administrator may not exceed one year. It may exceptionally be extended if the conditions for his appointment are still met at the end of this period. The Autorité de contrôle prudentiel et de résolution alone may modify or terminate the temporary administrator's appointment at any time.
IV. - The remuneration of the temporary administrator is set by the Autorité de contrôle prudentiel et de résolution. The remuneration and expenses incurred by the temporary administrator shall be borne by the person to whom he is appointed.
II of Article L. 612-34 applies to the remuneration and expenses incurred by the temporary administrator. When the remuneration and expenses incurred by the temporary administrator are paid under the conditions of II of Article L. 612-34, the Fonds de Garantie des Dépôts et de Résolution and the French State are subrogated to the rights of the temporary administrator to the extent of the sums they have paid.
In the event of the opening of safeguard, reorganisation or liquidation proceedings pursuant to Book VI of the Commercial Code, the prohibition on paying any claim arising prior to the opening judgment does not apply to the payment of the claim corresponding to the remuneration of the temporary administrator.
In the event of the opening or pronouncement of a judicial liquidation, the claim corresponding to the remuneration of the temporary administrator is paid by preferential right before all other claims, with the exception of those guaranteed by the preferential right established in articles L. 3253-2, L. 3253-4 and L. 7313-8 of the French Labour Code and the legal costs mentioned in II of article L. 641-13 of the French Commercial Code. It is not subject to the reporting obligation.
V. - The appointment of a temporary administrator is without prejudice to the rights of the holders of equity securities referred to in Chapter II of Title I of Book II or of other ownership securities.
The temporary administrator may not be considered as a de facto manager or as exercising in fact the functions of the persons designated in I of Article L. 131-1 of the Financial Jurisdictions Code.
VI. - Where the credit institution, investment firm or finance company mentioned in I is a parent undertaking or a subsidiary within the meaning of Article L. 511-20, Articles III and IV of Article L. 613-20-4, Articles L. 613-21-3 or L. 613-21-4, as applicable, shall apply.
