Bankruptcy Law

A de facto manager is liable for insufficient assets in the same way as a de jure manager, and may be held liable for the amount of such assets, provided they existed during the period in which he or she was in office . The status of de facto manager is established by proof of the independent performance of positive acts of management and direction within the company by a person who is not its de  …

Management interference

A de facto manager is liable for insufficient assets in the same way as a de jure manager, and may be held liable for the amount of such assets, provided they existed during the period in which he or she was in office . The status of de facto manager is established by proof of the independent performance of positive acts of management and direction within the company by a person who is not its de jure manager .

While the court takes into account a range of indicators in order to characterize de facto management, it relies primarily on the criterion of the independence of action of the supposed de facto manager. A partner must be considered a de facto co-manager if he alone takes commercial initiatives, concludes contracts binding the company, is the source of fraudulent transfers and controls the accounts . On the other hand, there is no evidence of independence when the de jure manager attends meetings with the manager in the company of the alleged de facto managers . Similarly, a sales manager who manages the commercial side of the business, as well as the company's research, development and communications , cannot be held liable, nor can a salaried manager who enjoys a very broad delegation of powers and who is described in his letter of redundancy as a de facto manager , in the absence of proof that he or she has carried out, in complete independence, specific positive acts of management and direction of the company. For the same reason, de facto management cannot be inferred from the mere fact that a shareholder, who did not have an employment contract until a year after joining the company, benefits from financial investments under a life insurance policy taken out by the company, In addition to his salary, he receives fees for bringing in business, has a company car that is not used for commercial purposes, and pays a deposit for rented equipment from his personal account . Nor can de facto management of a company be deduced from the sole fact of being a majority shareholder, even if the representatives of those partners take part in certain meetings of the supervisory board during which the choice of project, its development or the steps to be taken to obtain public subsidies are discussed . However, the majority shareholder who sets the purchase price for the company's goodwill and stock, as well as the terms of payment, establishes the registered office at his or her residence in a department other than that in which the business is carried on, defines the financial and economic operation of the company and its future prospects, and holds the de jure manager in a state of dependence and submission to his or her opinions, may be sued for payment of all or part of the shortfall in assets as a de facto manager .

The court hearing an action for payment of liabilities against a presumed de facto manager is required to verify in concreto whether he or she has carried out acts of management that go beyond his or her statutory powers. Such is the case of a partner/employee who exceeds the prerogatives of his employment contract and takes on the administrative and financial management of the company in the absence of the manager by right , or of a managing director who grants guarantees without submitting to the Board of Directors the agreements which fall within his remit, fails to give a true and complete account of his mission to the Board, and takes decisions on his own initiative and in complete independence which have proved disastrous for the company . On the other hand, the grantor who remains within the limits of the control prerogatives conferred on him by the contract cannot be considered as a de facto manager of the grantee . Similarly, the dependence of franchised companies, which enables the franchisor to force them to relinquish the management of their revenues through the conclusion of settlement agreements, is not sufficient to characterize the exercise of a positive management activity by the franchisor . Nor can the debtor's parent company, which exercises normal control over the activities of its sub-subsidiary and does not interfere in its management, be qualified as a de facto manager . Thus, the mere supervision by the parent company of certain functions or departments within the group of companies , and the need to obtain its approval for investments costing more than a certain amount, the sole purpose of which is to check that the planned expenditure complies with the group's general investment program and the allocated budget, without discussing its appropriateness , are not sufficient to characterize de facto management.

Another decisive criterion for qualifying as de facto management is the relationship maintained with employees, with regard to those who give themselves the appearance of an employer. Thus, a person who recruits employees, decides alone on the terms of payment of overtime or bonuses due despite the absence of a delegation of signature, and ensures the effective management of the company under cover of a fictitious mandate given to the de jure manager, must be considered as the de facto manager of the debtor company . The hiring of sales representatives, the exercise of hierarchical power over staff, relations with social and employment organizations and certain service providers, the termination of an employment contract during the probationary period, the signing of these acts when the de jure manager was rarely at the company's head office and without any subordinate relationship, are also characteristic of interference in the management of the company constituting de facto management . The former manager of an association who performs the duties of managing director without the control of the board of directors, and applies disciplinary sanctions to the staff, who regard him as their employer, must be considered as a de facto manager liable to contribute to the insufficiency of assets . Similarly, a shareholder, who appears to be the sole interlocutor of the employees in whose redundancy he has intervened, is the de facto manager of the debtor company . On the other hand, the status of de facto manager cannot be deduced from a letter sent to employees on the company's letterhead, in which the former de jure manager states that he or she no longer performs any functions within the company, but intervenes on an ad hoc basis at the request of the managers to provide them with a service, when the letter does not describe positive acts of direction and management performed in complete independence .

The fact of appearing to be the company's manager to third parties, in particular customers, banks and insurance companies, by being their privileged contact , contributes to the characterization of de facto manager status. The main shareholder of a debtor company must be considered as a de facto manager liable for the company's assets when, presenting himself as the contact person for creditors, both public and private, he has interfered in the management of the company, even if he has not been recognized as a co-employer in labor court proceedings . A natural person who acts as the debtor company's representative to customers, is designated on the website as the referent for the management and financing of the acquisition of goods, in the design and production of which he was involved, as well as in the resolution of commercial disputes, is the de facto manager . The instigator of a company's real estate transactions and recruitments, who personally monitors the tax audit, represents the company alone at the hearing to open the court-supervised liquidation and remains the sole contact for the legal representative, must be considered its de facto manager, all the more so when the manager by right possesses only technical skills and does not receive a management fee, but rather a self-employed entrepreneur's fee .

Lastly, a public-sector shareholder who does not confine himself to the role of investor or advisor, but exercises genuine management power by placing the Board of Directors in a state of dependence and subjecting the latter's decisions to the results of his research and opinions, must be considered as a de facto manager . The independence and sovereignty that characterize de facto management are assessed in relation to the legal entity within which the de facto manager exercises his power, so that a public establishment cannot invoke its submission to the direct supervision of the State to escape liability for mismanagement . An order for a commune to bear the debts of an association in its capacity as de facto manager is justified when it appoints certain members and keeps the association's accounts, when its approval is required for investment projects, when the rental rates for the multi-purpose hall are set jointly, and when the annual financial statement must be submitted to it .

On the other hand, the mere fact of having benefited from advantages comparable to those enjoyed by managers, or of having embezzled funds, does not enable the person concerned to be considered a de facto manager, since such behavior cannot be assimilated to acts of management. Thus, the mere fact that the alleged de facto manager holds the bank signature on the company's account is not sufficient to characterize interference in management resulting in a positive and independent activity , even if the de jure manager asserts that she has never managed the company . Similarly, the assignee of the debtor company's shares, who, having the signature of the bank, confuses the company's funds with his own, cannot be classified as a de facto manager in the absence of proof of the exercise of a positive and independent management activity . Furthermore, the fact that he signed a cash flow agreement with the parent company and a management lease on behalf of the debtor company, received benefits in kind normally reserved for managers and substantial salary advances, and that AGS did not assume responsibility for his redundancy payments, is not sufficient to characterize interference in the management and direction of the company by an alleged de facto manager .

Cass. com., 24 January 2018, LawLex202100001652JBJ (LJ); 27 January 2015, LawLex202100001675JBJ (LJ).

Cass. com., 27 June 2006, LawLex202100001647JBJ (LJ).

CA Paris, 15 November 2007, LawLex202200009550JBJ (LJ).

Cass. com., 26 October 1999, LawLex200200005248JBJ (LJ).

Cass. com. 27 May 2003, LawLex200300002299JBJ (LJ). Comp., when the franchisor interferes in the management of the franchisee and exceeds the obligations arising from the franchise agreement, Cass. com., 9 November 1993, LawLex200200004360JBJ (LJ).

Cass. com., 11 October 2016, LawLex202100001691JBJ (LJ).

Cass. com., 19 November 2013, LawLex202100001708JBJ (LJ).

Cass. com., 21 November 2018, LawLex202100001695JBJ (LJ).

CA Rouen, 3 March 2011, LawLex202300008609JBJ (LJ).

Cass. com., 27 June 2006, LawLex202100001649JBJ (LJ).

Cass. com., 17 November 2015, LawLex202100001780JBJ (LJ).

CA Paris, 12 January 2016, LawLex202200010797JBJ (LJ).

Cass. com., 10 July 2019, LawLex202300008479JBJ (LJ).

Cass. com., 20 April 2017, LawLex202100001697JBJ (LJ).

CA Versailles, 20 February 2018, LawLex202100001642JBJ (LJ).

Cass. com., 30 January 2019, LawLex202100001715JBJ (LJ).

CA Paris, 14 March 2018, LawLex202200010656JBJ (LJ).

Cass. com., 6 February 2001, LawLex202300010448JBJ (LJ).

Cass. com, 13 May 2003, LawLex202100001682JBJ (LJ). See also. Cons. d'Et., 1 October 2013, LawLex202300010558JBJ (LJ), holding that a commune may be held liable, in its capacity as de facto manager, for the insufficiency of assets of an association, provided that its mismanagement is reported within the applicable statute of limitations.

Cass. com. 1 December 2015, LawLex202100001683JBJ (LJ); 8 March 2017, LawLex202100001692JBJ (LJ), holding that the use of a bank signature by an individual, outside of any corporate mandate, is not sufficient to constitute a positive management act capable of characterizing de facto management.

Cass. com., 9 July 2002, LawLex202300010557JBJ (LJ).

CA Nîmes, 12 April 2023, LawLex202300007885JBJ (LJ).

Cass. com., 18 January 2000, LawLex202100001694JBJ (LJ).

Cass. com., 9 June 2022, LawLex202200011222JBJ (LJ).

Cass. com., 24 January 2018, LawLex202100001713JBJ (LJ).

Cass. com., 9 June 2022, LawLex202200009311JBJ (LJ).

Cass. com., 26 June 2001, LawLex202200009897JBJ (LJ).

Cass. com., 20 April 2017, LawLex202100001696JBJ (LJ).

Cass. com., 15 February 2011, LawLex202100001712JBJ (LJ).

Cass. com., 10 February 2015, LawLex202100001717JBJ (LJ).

Bankruptcy Law

985. Management interference

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985. Management interference

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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