This study examines the effects of insolvency proceedings—namely, turnaround and safeguard procedures—on the survival prospects of small and medium-sized enterprises (SMEs) experiencing financial distress. While both procedures provide legal protection and a framework for restructuring, they differ in timing, judicial oversight, and the degree of managerial discretion they allow. Using a Cox proportional hazards model, we analyze a dataset of French SMEs to assess how these proceedings influence firm survival. Our results indicate that the initiation of insolvency proceedings generally exerts a negative impact on firm survival. However, safeguard procedures, designed for early-stage intervention and grant greater managerial autonomy, are associated with less detrimental outcomes than turnaround procedures, typically invoked at more advanced stages of distress and involve more stringent judicial control. This study contributes to the existing literature by offering novel empirical insights into the differential effects of insolvency procedures on SME survival. The findings highlight the importance of early intervention and the preservation of managerial discretion in mitigating the adverse effects of financial distress.
