Notes · Bidding at the hearing

Bidding at the hearing: building an offer that wins

Acquiring a distressed business is not decided by the highest bidder. The court chooses the project that best preserves activity, jobs and creditors. Here is who can bid, what the offer must contain, how it is judged, and what the acquirer actually gets.

Verdoso · Investor & acquirer Published on 10 min read
Offer · Criteria · Effects
Step 1

Who can bid

Bidding at the hearing means acquiring a business under a sale plan, ordered by the court in judicial reorganisation or liquidation. The principle is open : any third party acting in good faith can file an offer.

One major exception frames that principle. Article L642-3 prohibits the debtor, its de jure or de facto directors, and their relatives (up to the second degree) from bidding, directly or through an intermediary. The point is to stop a director from wiping out their debts by buying back the business stripped of its liabilities. The court can lift this ban exceptionally, at the public prosecutor's request and by a specially reasoned ruling, notably for farms.

Step 2

What the offer must contain

The content of the offer is framed by article L642-2. An incomplete offer is set aside ; a precise one earns trust. It must set out :

  • The scope taken over : a precise designation of the assets, rights and contracts included.
  • The activity and financing forecasts : the operating plan and how it will be funded.
  • The price and its payment terms.
  • The quality of the capital providers and, where relevant, their guarantors ; for a loan, its terms and duration.
  • The level and outlook for employment justified by the activity, at the heart of the court's assessment.
  • The guarantees given to secure execution.
  • The planned asset disposals in the two years following the sale.
  • The duration of the various commitments made by the acquirer.
The sequence

From the call for offers to the ruling

Opening
Call for offersDeadline set by the court

When a sale is contemplated, the court sets the deadline by which offers must reach the judicial administrator (or the liquidator).

Filing
Firm and irrevocable offerArticle L642-2 V

The filed offer can no longer be withdrawn. It can only be modified in a way more favourable to the objectives of the sale, and binds its author until the court's ruling.

Debate
HearingPublic prosecutor heard

The court collects the public prosecutor's opinion and hears the debtor, the administrator, the creditors' representative, the employees' representatives and the supervisors.

Decision
Ruling approving the planArticle L642-5

The court keeps the offer that most durably ensures employment, the payment of creditors and the best guarantees of execution.

Execution
Completing the salePrice, transfer, inalienability

The price is paid, the designated assets and contracts are transferred, the employees taken on. The transferred assets are locked until the price is fully paid.

Step 3

How the court chooses

Article L642-5 sets three criteria, in an order that is not neutral. The court keeps the offer that best ensures, on the most durable terms, the employment attached to the transferred activities, the payment of creditors, and that presents the best guarantees of execution. Maintaining employment is the priority of the assessment.

In other words, an offer that is stronger on jobs and credible on financing often beats one that is simply more expensive but fragile. The court looks for the solution that lasts, not the one that pays most in the short term. That is good news for an industrial acquirer, serious and committed.

Step 4

What the acquirer gets, and their obligations

The appeal of bidding at the hearing rests on one powerful principle : the acquirer takes the designated assets and contracts free of almost all prior liabilities. Debts arising before the ruling stay in the procedure and are paid from the sale price. The acquirer leaves with the tool, without the burden.

That favour comes with duties. The contracts needed for the activity are transferred to the acquirer (article L642-7), as are the employees attached to the acquired activities (article L1224-1 of the Labour Code). The acquirer bears the future instalments of loans secured by a special charge over the assets they acquire (article L642-12). And as long as the price is not fully paid, they cannot resell the assets without the court's approval (article L642-9), which can also impose a temporary inalienability (article L642-10). Bidding at the hearing means acquiring fast and cleanly, but committing to last.

In practice · Verdoso

Acquiring to last, not to dismantle

The court entrusts a business to whoever can keep it alive. That is exactly Verdoso's ground : investing and acquiring since 1997, as a long-term shareholder that preserves activity, jobs and know-how. For a director, it is the assurance of entrusting what they built to an acquirer who speaks their language, that of the entrepreneur.

Price opens the door.
The project wins the decision.

Discuss a file The full guide

Frequently asked questions

Who can submit a takeover offer?
Any third party acting in good faith. Article L642-3 prohibits the debtor, its de jure or de facto directors and their relatives (up to the second degree) from bidding, directly or through an intermediary. The court may authorise it exceptionally, at the public prosecutor's request.
What must a takeover offer contain?
Under article L642-2 : the scope taken over (assets, rights, contracts), the activity and financing forecasts, the price and its terms, the quality of the capital providers and their guarantors, the level and outlook for employment, the guarantees, planned asset disposals and the duration of the commitments. For a loan, its terms and duration.
Can the offer be changed or withdrawn?
No. The offer is firm and irrevocable (article L642-2 V) : it cannot be withdrawn, nor modified except in a way more favourable to the objectives of the sale. It binds its author until the court's ruling approving the plan.
Does the court pick the highest offer?
No. Under article L642-5, it keeps the offer that most durably ensures the employment attached to the transferred activities, the payment of creditors, and that presents the best guarantees of execution. Employment is the priority ; price is never enough on its own.
Does the acquirer take on the debts?
No. They take the designated assets and contracts free of almost all prior liabilities ; the price pays the creditors. They take on the employees attached to the activity (article L1224-1) and, where relevant, the future instalments of loans secured by a charge over the acquired assets (article L642-12).
Can the acquired assets be resold immediately?
No. As long as the price is not fully paid, the acquirer cannot resell without the court's authorisation (article L642-9), which can also impose a temporary inalienability (article L642-10). Any substitution of acquirer must be authorised by the court.
Sources
  1. Content and firmness of the offer : article L642-2 of the Commercial Code.
  2. Prohibition for the director and their relatives : article L642-3 of the Commercial Code.
  3. Court's selection criteria : article L642-5 (CNAJMJ).
  4. Effects of the sale : articles L642-7 (contracts), L642-9 (inalienability, substitution), L642-10 (temporary inalienability), L642-12 (charges) ; article L1224-1 of the Labour Code (employees).
  5. Section on the sale of the business (art. L642-1 to L642-17).

This note presents the law in force as general information, up to date as of 1 July 2026. It is neither legal advice nor an offer of services : each situation must be examined with a lawyer and a court-appointed officer.