The judicial safeguard, or safeguard procedure, is a preventive procedure that can be opened at the request of a company which, without being in suspension of payments, justifies legal, economic or financial difficulties that it is not in a position to overcome.
The objective of the judicial safeguard is to allow the company director to reorganise his company in order to pay off his debts and to be able to envisage the continuation of his activity with peace of mind.
The safeguard procedure can have three different outcomes that vary according to the state of the company's situation:
- The disappearance of the conditions that justified the opening of the procedure: if the company's situation improves, it is possible to put an end to the procedure.
- The implementation of a safeguard plan: this allows the manager to take a series of measures to restructure the company and allow it to be safeguarded.
- Conversion of the safeguard into a judicial recovery plan: if the company is in a state of suspension of payments, the court will have to order the conversion of the safeguard procedure into a judicial recovery plan.