Learn more about curative procedures!

Jean-Luc Boisnon, Service Production Manager, and Richard Cassonnet, Customer Support Unit Manager, will discuss the main issues surrounding curative procedures.

This is the state of cessation of payments. This is characterized by the impossibility for the company to meet its current liabilities (debts that have fallen due) with its available assets (funds that the company can immediately dispose of). In concrete terms, it is the fact of not having the necessary cash flow to pay an undisputed debt on the right date.

The state of cessation of payments is an indispensable condition for the opening of curative procedures.

The most commonly used curative procedures are judicial recovery and judicial liquidation. Note that there is also the procedure of professional recovery intended for individual entrepreneurs (under certain conditions), as well as the procedure of treatment of exit of crisis (provisional procedure set up to face the difficulties caused or worsened by the health crisis).

No, they are not confidential. They are officially published in a SHAL (medium authorized to receive legal notices) and in the BODACC (official bulletin of civil and commercial notices).

These 2 procedures can be opened at the initiative of the company director. A creditor and the public prosecutor also have this option, except if a conciliation procedure is underway.

It should be noted that this possibility is not allowed for employees and the CSE.

Finally, the competent court may not refer the matter to itself.

Yes, because they concern all the creditors of the company. The latter are then deprived of any individual action against the debtor.

In the context of a judicial liquidation, the director is divested of his functions. The liquidator appointed by the court exercises, in the place of the director, his rights and actions on his assets, during the whole liquidation period.

In the case of receivership, the court may appoint an administrator to replace the director. However, this administrative mission remains exceptional, his role being generally limited to an assistance or monitoring function.

The observation period is set up to diagnose the company's situation. In principle, it is established for a maximum period of 6 months. This period can be renewed once at the request of the manager or the administrator, and once again at the request of the public prosecutor. However, this period can be interrupted if no recovery plan can be presented. In this case, the procedure will be converted into a judicial liquidation.

There are 4 possible outcomes:

  • Closure of the proceedings if the manager has sufficient funds to pay his debts and the costs incurred.
  • The implementation of a recovery plan allowing the settlement of debts over a maximum period of 10 years (15 years for farms) as well as the continuation of activity.
  • The implementation of a partial or total disposal plan.
  • The opening of a judicial liquidation procedure if the recovery is obviously impossible.

Creditors have a period of 2 months from the publication of the opening judgment of the collective proceedings in the Bodacc to declare their claims to the judicial representative. Note that this period is doubled for creditors domiciled outside metropolitan France. It is also doubled when the procedure is opened against a company having its registered office in an overseas department or collectivity, for creditors not residing there.

Creditors who have not declared their claims within the time limit cannot assert their rights. They are then considered as foreclosed.

The simplified judicial liquidation procedure (shorter and less costly procedure) requires different criteria depending on whether the debtor is a legal entity or a natural person.

For a legal entity, it can be initiated if it does not have any real estate, if it does not employ more than 5 employees and if its turnover does not exceed 750,000 euros excluding tax.

For an individual, it is open without criteria of turnover and employees. The only condition is the absence of real estate.

The court sets the deadline for the closure of the judicial liquidation proceedings. If the liquidation is not completed within 2 years of the opening judgment, the creditors may request the court to close the proceedings.

At the end of the liquidation operations, a closure for extinction of liabilities may be pronounced when the liquidator has sufficient funds to reimburse the creditors. Otherwise, the court will declare the liquidation closed for lack of assets.

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