Bondholders' representative: authorization to take legal action can be granted via written consultation

Article L. 228-54 of the French Commercial Code requires the representative of the bondholders to obtain authorization from the general meeting before initiating legal action on behalf of the bondholders.

Is it necessary to formally convene a general meeting to do so?

No.

The Court of Cassation confirms that this authorization may be granted via written consultation, including by electronic means, provided that the issuance contract allows for it (Article L. 228-46-1 of the Commercial Code).

This is a pragmatic solution: it provides the bondholders' organization with the flexibility needed to quickly authorize legal action, without the burden of convening a general meeting.

Keep this in mind when drafting your issuance contracts.