Bankruptcy Law

A creditor who has wrongfully assisted a debtor in an insolvency procedure may be held liable in the event of fraud . In civil or commercial matters, fraud is defined as an act carried out using unfair means intended to obtain consent by trickery to obtain an undue material or moral advantage, or carried out with the intention of evading the application of a mandatory or prohibitive law . As these …

Fraud

A creditor who has wrongfully assisted a debtor in an insolvency procedure may be held liable in the event of fraud . In civil or commercial matters, fraud is defined as an act carried out using unfair means intended to obtain consent by trickery to obtain an undue material or moral advantage, or carried out with the intention of evading the application of a mandatory or prohibitive law . As these conditions are difficult to characterize, abusive support is very rarely established on the basis of fraud.

The courts do not consider fraudulent the fact that a creditor accepts drafts that indirectly allow the debtor to be granted payment terms  or that a bank does not close the debtor's bank account, notwithstanding a letter of denunciation, and negotiates agreements to amortize his debit balance . The presence of a notary means that fraud can be ruled out against a bank which, in defiance of a conciliation agreement, modifies the amount of a consolidation loan granted to the debtor in order to grant him a higher notarized loan, with new guarantee requirements . The granting of a loan subject to a mortgage, while manifesting the bank's desire to protect its own interests to the detriment of others, does not constitute fraud, in the absence of deception, deceit or contravention of the law or regulations . The granting of a business loan by a bank, with the aim of ensuring, in the short term, the recovery of instalments on previous loans, is not sufficient to characterize fraud within the meaning of Article L. 650-1 of the Commercial Code , in particular if it does not increase the debtor's indebtedness and does not result in the artificial support of the business in its personal interest . The granting of financial bills, systematically renewed without the debtor company ever starting to repay them, does not constitute fraud on the part of the bank, since it has not been established that it has recycled unsecured prior claims into a new claim backed by an endorsement, and that the successive bills have merely renewed the credit, without providing additional guarantees in its favor . Similarly, loans that were not granted for any purpose other than maintaining business activity or fulfilling the company's corporate purpose, by a bank that had no information on the debtor's situation of which the debtor or its manager were unaware, are not fraudulent , especially when they were not the subject of a claim declaration on the part of the debtor .

In the final analysis, the courts will only uphold fraud when the creditor has granted assistance to the debtor, whose desperate economic situation he was aware of, without this allowing the business to continue .

Cass. com., 2 October 2012, LawLex202200010272JBJ; 8 January 2020, LawLex202300008039JBJ.

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

CA Versailles, 20 January 2011, LawLex202300007850JBJ (LJ), considering that a credit institution which authorizes an overdraft for the sole purpose of obtaining a guarantee from the manager of the debtor company and his companion, for an amount corresponding to the debit balance of the account and to a loan, while being everyday aware of the desperate economic situation of the company, and without this authorization being able to have any favorable repercussions on the activity of the debtor company or on its durability, commits fraud within the meaning of Article L. 650-1 of the Commercial Code.

Cass. com, 16 October 2012, LawLex202100001547JBJ (LJ), confirming on this point CA Versailles, 12 May 2011, LawLex202300008282JBJ (LJ).

Cass. com., 2 October 2012, LawLex202200010272JBJ (LJ).

Cass. com., 13 December 2017, LawLex202200010277JBJ (RJ).

Cass. com. 8 March 2017, LawLex202100001572JBJ (LJ). See also. Cass. com., 27 March 2012, LawLex202100001570JBJ (LJ), on the submission of an overdraft authorization granted to the debtor whose situation is compromised, to obtaining a surety undertaking; CA Bourges, 6 January 2022, LawLex202300008266JBJ (RJ).

Cass. com., 8 January 2020, LawLex202300008039JBJ (LJ).

Cass. com., 9 May 2018, LawLex202300007862JBJ (LJ).

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

Cass. com., 28 January 2014, LawLex202100003113JBJ (LJ).

Bankruptcy Law

974. Fraud

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Les notions juridiques connexes

974. Fraud

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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