The security fiducie has established itself as a benchmark guarantee under French structured-financing law. The asset is transferred into a distinct fiduciary patrimony, which allows an efficient realisation, in principle sheltered from the settlor's insolvency proceedings (subject to any agreement leaving the asset at the settlor's disposal, Commercial Code art. L. 622-23-1), and precise coordination with bank pools. The Cass. com., 22 January 2025 (no. 22-20.526), handed down in a case involving a transfer of equity securities into a fiducie, illustrates the extent of the prerogatives the fiduciary exercises over the transferred rights. The firm, registered with the Paris & Geneva Bars, structures and defends these transactions.
The fiducie (Civil Code art. 2011 et seq.) allows a settlor to transfer assets, rights or security to a fiduciary, who holds them in a separate ring-fenced patrimony, with a duty to act for the benefit of one or more beneficiaries. As a form of guarantee, the security fiducie dedicates this mechanism to securing a claim: the asset is removed from the settlor's own assets to guarantee repayment.
The decisive strength is the segregation of the fiduciary patrimony: the transferred assets are no longer among the settlor's assets and, in principle, escape the latter's insolvency proceedings. One important caveat: where the settlor retains the use or enjoyment of the asset under an availability agreement, article L. 622-23-1 of the Commercial Code prohibits any assignment or transfer of the asset to the fiduciary or a third party by the mere effect of the opening of safeguard or reorganisation proceedings, the adoption of the plan or the non-payment of a pre-filing claim. This is nonetheless what distinguishes the security fiducie from classic real security (mortgage, pledge), often neutralised or slowed by the proceedings.
The realisation is also more efficient: in the event of non-payment, the beneficiary may have the asset attributed to it or have it sold according to the agreed terms, without the burden of a classic seizure. The value of the asset is then determined by an expert, save for statutory exceptions, and any surplus over the secured debt is returned to the settlor (Civil Code art. 2488-3). For bank pools and leveraged financings, this predictability explains the tool's return to favour.
The Cass. com., 22 January 2025 (no. 22-20.526), published in the bulletin, offers an illustration: equity securities had been transferred into a fiducie to secure a bond issue, and the fiduciary, exercising the voting rights attached to the securities, had removed the company's president. The Court held inadmissible the application for the appointment of a provisional administrator brought by that officer, as it sought to protect his personal interests rather than the corporate interest. The case shows in concrete terms that the fiduciary exercises the prerogatives attached to the transferred rights: once the asset is placed in fiducie, the settlor no longer has free disposal of it.
The power of the security fiducie lies in its drafting. The fiducie contract, the choice of fiduciary and the coordination with other creditors determine the real effectiveness of the guarantee.
Precise definition of the transferred assets, the fiduciary's mission, the realisation events and the return terms. The choice of an authorised fiduciary (credit institution, lawyer, investment firm) determines the security of the transaction.
Coordination of ranks, designation of beneficiaries, security agent and sharing clauses. The security fiducie integrates into syndicated financings by clarifying who controls the asset in the event of default.
Securing the realisation in the event of default: attribution to the beneficiary or sale. Care is needed with the availability agreement leaving the asset at the settlor's disposal: where it exists, article L. 622-23-1 of the Commercial Code stays the realisation during safeguard or reorganisation proceedings. Whether or not to leave the use of the asset with the settlor is therefore a structuring decision.
The fiducie regime seeks tax neutrality, subject to conditions, where the settlor is designated as beneficiary (French Tax Code art. 238 quater B et seq.); transfers, registration duties and exit consequences must be anticipated from the structuring stage.
Maître Jonathan Bensaid, founding partner, structures and defends real-estate security fiducies in structured financings: drafting of the fiducie contract, choice of fiduciary, coordination with bank pools and securing of the realisation. The firm is registered with the Paris & Geneva Bars and acts both as counsel and in litigation.
It is a guarantee by which a settlor transfers ownership of a real-estate asset (or the securities of a real-estate company) to a fiduciary, who holds it in a separate ring-fenced patrimony for the benefit of a beneficiary creditor, as security for a claim. In the event of default, the beneficiary can have the asset attributed to it or have it sold according to the terms set out in the fiducie contract, without resorting to a classic seizure.
Because the asset leaves the settlor's own assets to join a distinct fiduciary patrimony. It escapes, in principle, the settlor's insolvency proceedings, whereas a mortgage or a pledge may be neutralised or slowed by the opening of safeguard or reorganisation proceedings. The main caveat concerns the agreement leaving the asset at the settlor's disposal: article L. 622-23-1 of the Commercial Code then stays the realisation during safeguard or reorganisation. The realisation otherwise remains faster and more predictable than a seizure, which reassures lenders and bank pools.
The judgment, published in the bulletin, concerns equity securities transferred into a fiducie to secure a bond issue. The fiduciary, exercising the voting rights attached to the securities, had removed the company's president; the Court held inadmissible the application for the appointment of a provisional administrator brought by that officer, finding it sought to protect his personal interests rather than the corporate interest. The case illustrates that the fiduciary exercises the prerogatives attached to the transferred rights: once the asset is placed in fiducie, the settlor no longer has free disposal of it.
In principle yes, because the transferred assets no longer form part of the settlor's own assets. Vigilance concerns the agreement leaving the asset at the settlor's disposal: where the settlor retains the use or enjoyment of the asset, article L. 622-23-1 of the Commercial Code prohibits any assignment or transfer of the asset to the fiduciary or a third party during safeguard or reorganisation proceedings. Careful structuring, particularly on this point, is therefore decisive in preserving the effectiveness of the guarantee.
The firm, registered with the Paris & Geneva Bars, structures the security fiducie (fiducie contract, choice of fiduciary, coordination with bank pools and the security agent), secures the realisation terms and defends the transactions in the event of litigation. It acts for lenders as well as for borrowers on structured real-estate financings.
Related resources on the fiducie, security and structured financings.
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Voir la pageA confidential initial consultation. Drafting of the fiducie contract, choice of fiduciary, coordination with bank pools, securing of the realisation and defence of structured-financing transactions.
© BENSAID Avocats — This article is educational and indicative. It does not constitute personalised legal advice. Sources: Civil Code art. 2011 et seq. (fiducie); art. 2372-1 et seq. / 2488-1 et seq. (security fiducie); Commercial Code art. L. 622-23-1 (insolvency proceedings); Cass. com., 22 January 2025, no. 22-20.526, published in the bulletin. Update: June 2026.
