A safeguard proceeding for the group that did not prevent the liquidation of its senior care business
The situation of the Réside Études group illustrates the varying effects of a collective proceeding initiated at the group level. While several entities within the group benefited from a safeguard proceeding designed to facilitate their restructuring, its subsidiary specializing in the operation of senior assisted living facilities, Réside Études Seniors, was ultimately placed in judicial liquidation after its attempt at independent recovery failed.
The case presents a particular challenge. The Réside Études group itself was not subject to general liquidation. The group’s main companies were placed under safeguard proceedings by court orders issued on or after December 4, 2023, while the senior living subsidiary followed a separate procedural path. This distinction between the group’s situation and that of the subsidiary is essential to understanding the consequences of the restructuring.
French law allows for the initiation of safeguard proceedings when a company that is not in default encounters difficulties it is unable to overcome. The proceedings are intended, in particular, to enable the business to continue operating, preserve jobs, and settle liabilities. However, when a turnaround appears impossible, the court may convert the proceedings into judicial liquidation and, where possible, arrange for the sale of all or part of the business.
The Procedural History of Réside Études Seniors
Réside Études Seniors was initially placed under safeguard proceedings by a ruling of the Paris Commercial Court on December 4, 2023. These proceedings were initiated against a backdrop of difficulties affecting the entire group, notably the health crisis, the slowdown in the real estate market, and rising interest rates.
The senior living division, however, faced its own specific vulnerabilities. According to the evidence reviewed by the Paris Economic Activities Court, the business model for senior assisted living facilities remained structurally unprofitable during the first years of operation. The increase in occupancy rates was too slow, while the level of services offered generated high costs relative to the rents and fees collected.
The safeguard proceedings failed to restore the subsidiary’s financial stability on a sustainable basis. By judgment dated June 11, 2024, the safeguard proceedings were converted to judicial reorganization, with the court-appointed administrators retaining an advisory role. This conversion reflected the recognition that the situation had deteriorated and that a takeover solution needed to be sought.
The subsidiary was subsequently placed in judicial liquidation, which was ordered on November 28, 2024. The same judgment approved a sale plan in favor of SAS Stella Management and SARL Zenitude Senior Exploitation. The company was authorized to continue operations until January 28, 2025, to allow for the operational implementation of the takeover. 1
It is therefore more accurate to refer to the judicial liquidation of Réside Études Seniors than to “bankruptcy” in the common sense of the term. The term “bankruptcy” does not correspond to the primary legal classification under contemporary French law. Judicial liquidation refers to a procedure intended to terminate the debtor’s business operations or to organize the sale of its assets and business units when its rehabilitation is clearly impossible.
A sale intended to preserve the operation of the residences
The judicial liquidation did not result in the immediate closure of the residences operated under the Les Girandières and Palazzo brands. The court favored a sale arrangement that would allow for the takeover of a large portion of the portfolio and the continuity of operations.
The joint bid by Stella Management and Zenitude Senior Exploitation involved the acquisition of nearly all of the senior living facilities operated by Réside Études Seniors. According to information published at the time of the decision, approximately 75 facilities and more than 6,000 residents were affected by this takeover. 2
This solution met several objectives. It prevented an abrupt interruption in the care of residents, preserved a substantial portion of jobs, and ensured the continued operation of the facilities. It also provided a solution for property owners whose income depended on the continued operation of the senior residences.
With regard to the divestiture plan, the court determines which contracts are necessary to maintain operations and may transfer responsibility for them to the transferee. The contracts taken over must, in principle, be performed under the terms in effect on the date the proceedings were opened, subject to the specific rules of the transfer plan. Disputes that arose after the takeover highlight the importance of this rule, particularly regarding the payment of rent and charges owed to landlords.
Several decisions handed down in 2026 thus ordered Zenitude Senior Exploitation to pay rent provisions when the leases had been assumed as part of the divestiture plan and the rent remained unpaid. These rulings emphasize that the assumption of the business entails the assumption of the obligations attached to the transferred contracts, unless a modification is clearly established.
The Economic Causes of the Failure
The rulings issued in the group’s proceedings highlight a combination of cyclical and structural difficulties.
The hotel and student housing operations were severely impacted by the health crisis. In particular, Réside Études Apparthotels’ revenue reportedly fell by nearly half between 2019 and 2020. While certain operations subsequently returned to their previous levels, real estate development suffered from the slowdown in the real estate market and rising financing costs.
The senior living segment faced more profound difficulties. The business model relied on a gradual increase in occupancy rates and a relatively broad range of services. However, the residences’ fixed costs and personnel expenses remained high during the launch phase, while revenue grew more slowly.
The situation was also exacerbated by intra-group financial transactions. The rulings issued in the safeguard proceedings refer to cash pooling mechanisms, the assignment of rental receivables, and a risk of a liquidity crisis linked to the decline in the replenishment rate of a securitization fund. The group therefore had to simultaneously address the profitability of its core operations, the financing of its liabilities, and the protection of its various holding companies.
The spin-off of the senior care division was a central element of the group’s restructuring strategy. The court-appointed administrators noted that the student and tourism divisions, which were not operating at a loss prior to the initiation of proceedings, had indirectly borne the cost of keeping the loss-making senior care division in operation. The divestiture of this business was therefore presented as a condition for the group’s financial and operational reorganization.
The Réside Études group continued its own restructuring
The liquidation of Réside Études Seniors does not mean that the Réside Études group as a whole has been liquidated. Several companies within the group benefited from rescue plans approved by the Paris Economic Court on June 24, 2025.
The rescue plan for Réside Études Investissement was approved for a period of ten years. The court accepted the existence of cash flow projections that allow for the continuation of operations and the settlement of liabilities. The ruling specifically mentions a projected cash flow of 270.2 million euros over the plan’s term and a projected final cash balance of approximately 147 million euros.
The plan for Réside Études Appart’Hôtels, meanwhile, was approved for a period of eight years. The court noted that the company retained a reasonable prospect of avoiding insolvency and that dissenting creditors were not in a less favorable position than they would have been had the company undergone judicial liquidation.
These plans rely on several measures. In particular, they call for cost restructuring, improved occupancy rates, operational reorganization, and the sale of real estate assets. They also manage intragroup cash flows to ensure that the companies benefiting from the plan are not deprived of the liquidity necessary for their own operations.
In several proceedings, the court has approved the establishment or continuation of a cash pooling agreement when such an arrangement was justified by the economic interdependence of the group’s companies and compatible with the protection of creditors. However, this solution does not constitute a general authorization to freely transfer cash from one company to another. The decisions make certain cash transfers contingent upon the prior repayment of the relevant company’s liabilities.
The Implications for Key Stakeholders
For residents, the main concern was the continuity of care and services. The sale to Stella Management and Zenitude Senior Exploitation prevented a widespread closure of the facilities. However, it did not preclude changes to the organization, trade name, staff, or operating conditions.
For employees, the liquidation of the former operator led to the intervention of the insolvency proceedings authorities and, depending on the situation, the employee claims guarantee scheme. The takeover of some of the facilities allowed for the transfer or retention of some jobs, but each employee’s situation depended on the exact scope of the sale and the decisions made for each residence.
For landlords, the proceedings raised questions regarding the payment of past-due and future rent, the transfer of leases, and the identity of the new operator. The assumption of a lease as part of a divestiture plan does not exempt the transferee from fulfilling the transferred contractual obligations. Rental disputes that arose after the takeover demonstrate that securing the relationships between landlords and transferees is a major challenge in the restructuring process.
For investors and owners of units in senior living communities, the operator’s default highlights the risk associated with arrangements based on a commercial lease and the promise of regular rent payments. The operator’s financial stability, the diversification of its business, the quality of the lease, the guarantees provided, and the terms for replacing the operator must be examined independently of the property’s real estate value.
A Restructuring Effort Rather Than the Group’s Demise
Réside Études’ situation can be understood as a refocusing effort. The senior living division, which had become structurally unprofitable, was spun off and subsequently sold as part of a judicial liquidation. At the same time, the student housing, hotel, and real estate divisions were subject to rescue plans designed to allow the group to continue operating on a reduced and reorganized scale.
This distinction between the group’s survival and the legal dissolution of a subsidiary reflects the principle of the autonomy of legal entities. Insolvency proceedings initiated against a subsidiary do not automatically extend to its parent company or other companies within the group. However, cash flows, guarantees, treasury agreements, and cross-commitments can make the proceedings economically interdependent.
The outcome of this restructuring will therefore depend less on the acquisition of the senior care division alone than on the group’s ability to implement its recovery plans, improve the profitability of its core businesses, and manage its financial obligations. The sale of Réside Études Seniors eliminated a loss-making business, but it was not sufficient on its own to ensure the success of the group’s restructuring.
Conclusion
Réside Études did not go bankrupt as a whole. The group benefited from several safeguard proceedings and plans finalized in 2025. However, its subsidiary Réside Études Seniors was placed in judicial reorganization on June 11, 2024, and subsequently placed in judicial liquidation on November 28, 2024, with its business sold to Stella Management and Zenitude Senior Exploitation.
The transaction made it possible to maintain operations at a large portion of the residences and to limit the social and economic consequences of the default. It also transferred to the buyers the responsibility to continue operations and fulfill the assumed contracts, particularly the commercial leases. Finally, this case illustrates the need to distinguish the legal status of each company within a group, even when their operations and financing are closely intertwined.
