Eurotunnel has been locked in restructuring talks with its creditors over the past few months, trying to reach a compromise solution that is acceptable to its various creditors. On Aug. 2, the Paris courts placed the company on safeguard proceedings, similar to U.S. Chapter 11. In France, these safeguard proceedings are intended to help distressed businesses rehabilitate themselves before their financial difficulties become irreversible.
"At the 11th hour, Eurotunnel presented a compromise solution which maintained the framework of the plan agreed with senior creditors but also tried to appease junior debt holders, however this proposal was rejected," Dresdner Kleinwort Wasserstein explained. "Once the company enters bankruptcy protection, the restructuring talks will resume but within the boundaries defined by the French courts."