Compagnie de Financement Foncier

Liabilities benefiting from a senior priority of payment

A specific privilege is granted to "obligations foncières" and to other privileged resources (article L.515-19): privileged debts are paid at their normal due date, by priority over all other debts both for the interest and the principal, until their total repayment including in case of bankruptcy or court-ordered liquidation of the company. The investor is protected by the fact that Compagnie de Financement Foncier is not affected by cases of bankruptcy or court-ordered liquidation of its shareholders or loan manager (articles L.515-25 à L.515-28).

Type of the specific privilege

1. All cash flows from assets are allocated by priority to privileged debts (article L 515-19.1) 
2. In the event of bankruptcy or court-ordered liquidation of the SCF: privileged debts are paid at their normal due date, with priority over all other debts both for the interest and the principal, until their total repayment (Article L.515-19.2)
3. The liquidation of the SCF does not make the privileged debts due (Article L.515-19.3)

Non extension of the risk of bankruptcy

1. Holders of obligations foncières are protected by the privileged claim under Article L. 515-19;
2. The court-ordered liquidation of a shareholder of the SCF cannot be extended to the SCF (Article L.515-27);
3. Asset transfers prior to a declaration of insolvency remain valid and cannot be disputed.