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It is now possible for creditors and co-contractors of insolvent companies to take certain steps in French insolvency proceedings and make certain statements “online”.
Published in the middle of August, the 2015-1009 decree of 18 August 2015 could easily have gone unnoticed, if it hadn’t been expected for several months by us “technophile” practitioners.
A scandal in the world of letters and old manuscripts would not have gone unnoticed and the French case of Aristophil has lead to extensive press coverage; a massive fraud is suspected with thousands of works and hundreds of millions of euros at stake.
The continued modernisation of the French economy has been a long and difficult process but, as a former British prime minister was fond of saying, “there is no alternative”.
It is not always easy to prioritize between the various goals pursued in every insolvency legislation, namely; the continuation of the company, preservation of the jobs, the general economic/public interest and the payment of dividends to creditors.
There is no clear hierarchy in French law amongst these major targets and French case law appears fairly pragmatic. However compared to Insolvency regulations in other countries, French legislation and French case law appear very protective of the interests of the employees.
This seems obvious when one considers, for example,
Admission de l’inscription définitive d’une hypothèque judiciaire provisoire malgré la liquidation judiciaire
Cass. Com, 3 mai 2016, n°14-21.556
Aux termes d’un arrêt de principe, la Cour de cassation entérine et confirme la possibilité pour le créancier disposant d’une hypothèque judiciaire provisoire, inscrite avant le jugement d’ouverture, de l’inscrire définitivement après la liquidation judiciaire du débiteur.
A recent decision of the Slovak Courts suggest that if main proceedings have been opened in one member state and the debtor has assets in Slovakia, the insolvency practitioner in the main proceedings must act quickly and sell those assets before secondary proceedings are opened in Slovakia, otherwise he runs the risk of losing the assets to the secondary estate. Legal title to the assets must have passed to the buyer before the secondary proceedings are opened; it is not enough just for contracts to have been exchanged.
In the context of the EU Directive 2019/1023/UE of 20 June 2019 (“Directive”) and in the aftermath of the Covid crisis, France has reformed its insolvency legislation. The purpose of the legislation is both to implement the requirements of the Directive into the French legislation, but also to tackle the consequences of the Covid crisis and endorse some of the measures that have been taken in this respect and have brought the number of insolvency proceedings to a historic low, as well as other measures.
Cass. Com., 10 mars 2021, n°19-12.825
Dans le cadre d’une procédure de liquidation judiciaire, un liquidateur a assigné directement et conjointement le dirigeant de la société et son assureur pour demander leur condamnation solidaire au paiement de l’insuffisance d’actif des sociétés sur le fondement des articles L. 651-2 du code de commerce et L. 124-3 du code des assurances.
Cass. com., 10 mars 2021, n° 19-22.385
L’article L. 622-24 du Code de commerce est clair : tout mandataire ou préposé du créancier peut effectuer pour le compte de celui-ci une déclaration de créance au passif d’un débiteur à l’encontre duquel une procédure collective a été ouverte.
En effet, cet article prévoit notamment (alinéa 2) que :
This quick guide summarises the duties that directors of companies incorporated in France are subject to, and how those duties change when the company is insolvent or at risk of being insolvent.
This quick guide summarises the duties that directors of companies incorporated in France are subject to, and how those duties change when the company is insolvent or at risk of being insolvent.
It also gives an overview of the personal risk to directors when the company is in financial difficulty.