Bankruptcy Law

Creditors can only be held liable for harm suffered as a result of credit facilities granted, even in cases of fraud, blatant interference in the management of the debtor or the provision of disproportionate guarantees , if the credit facilities themselves are at fault . A guarantor wishing to hold a credit institution liable on the basis of Article L. 650-1 of the Commercial Code may not win the  …

Requirement of fault

Creditors can only be held liable for harm suffered as a result of credit facilities granted, even in cases of fraud, blatant interference in the management of the debtor or the provision of disproportionate guarantees , if the credit facilities themselves are at fault . A guarantor wishing to hold a credit institution liable on the basis of Article L. 650-1 of the Commercial Code may not win the case by relying solely on unfair means characterizing fraud, without demonstrating the existence of fault in the granting of the loans . Nor is the mere disproportion of a guarantee given in connection with financial assistance granted by a credit institution sufficient to render the guarantee null and void, in the absence of fault on the part of the bank in granting the credit . Conversely, the existence of fault in the granting of credit, even if established, is not sufficient to engage the liability of the banking establishment, in the absence of proof of fraud , of clear-cut interference in the management of the debtor, or of the assumption of disproportionate guarantees . Thus, it is not necessary to assess the wrongful nature of the financing granted when no behavior is established that could give rise to creditor liability .

Assistance granted by a creditor is wrongful if it is established that it could only lead to the ruin of the debtor . This is the case when a ruinous credit policy is implemented, likely to cause a continuous and insurmountable increase in the debtor's financial charges, given its profitability prospects and ability to repay . Similarly, ruinous credit is granted by a supplier who, in addition to granting payment deadlines, transforms outstanding amounts into interest-bearing loans secured by a first-ranking mortgage and an agricultural warrant, the annual capital and interest repayments of which exceed the customer's ability to pay in view of his operating results, which he knows because he has access to the company's accounts . The granting of ruinous credit is assessed not only with regard to the situation of the borrowing company, but also that of the companies to which it is linked .

On the other hand, the creditor cannot be held liable for fault if the loans granted did not cause the debtor's ruin. Assistance in the form of everyday account advances is not considered to be at fault when it is of a one-off nature, was provided several years before the difficulties arose, and when its amount, in relation to the company's level of activity and degree of indebtedness, excludes any causal link with the difficulties . The fact that a company's cash flow remains lower than its capital repayments for a prolonged period of time does not necessarily mean that loans granted over a two-year period are at fault, provided that during this period there has been a net, if not sufficient, improvement in EBITDA (Earnings before interest taxes and amortization), net income and therefore cash flow . Nor can a loan which had the dual beneficial effect of reducing the debtor's interest rate and substituting a debt payable in 8 years, with a one-year grace period, be considered faulty . Lastly, a bank is not at fault if it shows restraint in granting credit, limiting it to sums that it can reasonably expect its client to repay, and privileges secured loans over unsecured ones .

A creditor is also at fault if it has granted a loan to a debtor whose situation was already irremediably compromised . Proof of the debtor's perennial and inextricable financial difficulties, at the date of the allegedly abusive support, cannot be deduced either from accounting documents dating back more than two and a half years after the credit facility in question was opened, or from the granting of two other loans for the purpose of consolidating the account overdraft and taking over outstanding loans, since their monthly repayments were adjusted so as not to increase the debtor's monthly repayment burden . The opening of the safeguard procedure one year after the granting of a financial assistance is likely to demonstrate that the latter was not at fault, as long as the company's situation was not irremediably compromised . The granting of an overdraft on an account, even if it is not in writing, is also not at fault when it takes place after the debtor's accounts have shown a balanced result .

It is also wrongful to grant loans that give the debtor a misleading appearance of solvency, thereby increasing the debtor's liabilities. A bank which agrees to open a second everyday account, when the first is already in debit, and allows it to operate in a debit position in proportions which rapidly become significant, commits a fault insofar as these disguised loans have increased the company's liabilities through the high interest charged, given the debtor a misleading appearance of solvency and delayed the declaration of cessation of payments . The granting of financial bills, systematically renewed without the debtor company ever starting to repay them, which has the effect of giving a misleading appearance of the state of its bank account, constitutes wrongful assistance when this practice continues for two years while, at the same time, the company's performance does not improve . On the other hand, a bank which, by means of an everyday accounting practice, re-credits loan repayments which have not been honored, without charging interest to the debtor , or which simply renews the various lines of credit granted up to that point, despite deficits which do not call into question the debtor's economic and financial situation, does not grant wrongful assistance if it does not worsen the debtor's indebtedness .

Cass. com., 19 June 2012, LawLex202100003122JBJ (LJ); 20 September 2017, LawLex202300009725JBJ(LJ).

Cass. com., 8 January 2013, LawLex202100003129JBJ (LJ).

CA Amiens, 24 October 2019, LawLex202300008276JBJ (RJ).

Cass. com., 19 June 2012, LawLex202100003122JBJ (LJ).

CA Rennes, 16 November 2021, LawLex202300008314JBJ (LJ).

Cass. com., 22 March 2017, LawLex202100001567JBJ (LJ).

CA Besançon, 23 November 2021, LawLex202300007846JBJ (LJ).

CA Chambéry, 3 March 2022, LawLex202300008265JBJ (LJ).

CA Aix-en-Provence, 4 April 2019, LawLex202300008313JBJ (LJ).

Cass. com., 21 November 2018, LawLex202300007864JBJ (LJ).

CA Rennes, 13 September 2022, LawLex202300008261JBJ (LJ).

Cass. com., 1 July 2020, LawLex202300007859JBJ (LJ).

Cass. com. 27 March 2012, LawLex202100001563JBJ (LJ); 11 December 2012, LawLex202300008112JBJ (LJ); 29 June 2022, LawLex202200009309JBJ (LJ), considering that the court's mere analysis of the disproportion between the value of the guarantees granted and the amount of the loan granted does not dispense it from investigating and qualifying the fault committed by the bank in granting the financing.

Cass. com., 20 January 2021, LawLex202300007863JBJ (LJ).

CA Paris, 21 October 2020, LawLex202000002837JBJ (RJ).

Cass. com., 11 May 2010, LawLex202100005450JBJ (RJ).

Cass. com., 10 January 2018, LawLex201800000065JBJ (RJ).

Bankruptcy Law

972. Requirement of fault

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972. Requirement of fault

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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