Bankruptcy Law

Pursuant to Article L. 642-24 of the Commercial Code, the liquidator may, with the authorization of the bankruptcy judge and with the debtor heard or duly summoned, compromise or settle all disputes concerning the collective interests of creditors. If the subject matter of the compromise or settlement is of indeterminate value or exceeds the ultimate skill of the court, the compromise or settlemen …

Authority to compromise

Pursuant to Article L. 642-24 of the Commercial Code, the liquidator may, with the authorization of the bankruptcy judge and with the debtor heard or duly summoned, compromise or settle all disputes concerning the collective interests of creditors. If the subject matter of the compromise or settlement is of indeterminate value or exceeds the ultimate skill of the court, the compromise or settlement is subject to approval by the court.

The liquidator may make use of these provisions to reach a settlement with the manager of the debtor company in compensation for the absence of legal proceedings under Article L 651-2 of the Commercial Code . The Public Prosecutor cannot oppose the approval of a settlement between the debtor company's manager and the liquidator on the grounds that the contribution to be made by the former is insufficient in view of the shortfall in assets, since the action is not aimed at ordering the latter to pay the entire shortfall in assets, and is subject to the court's discretionary power of assessment . On the other hand, a settlement cannot put an end to actions seeking a professional sanction, such as a management ban or a personal bankruptcy order, which are in the public interest . Furthermore, although a settlement may be reached before legal proceedings are instituted, orders for the payment of company debts issued by the court under Article L. 651-2 of the Commercial Code cannot be the subject of a settlement , making it impossible to approve such a settlement . Consequently, the court is not obliged to consider whether a manager's right to a fair trial and respect for his or her assets is unjustifiably discriminated against by not examining his or her settlement offers . Furthermore, settlements which concern the payment of company debts must be annulled, even if the judgment was not final at the date of signature of the protocol .

A manager who has benefited from a settlement cannot justify his failure to implement it by claiming insufficient financial resources, unless he can prove that it is impossible for him to sell the real estate he owns, the value of which has increased considerably . He cannot claim to be liable only in proportion to the amount that the liquidator was prepared to accept, in order to pay off creditors, up to 25 to 30% of the shortfall in assets, if the operative part of the court ruling approving the settlement, which is the only one to be taken into consideration, does not concern the settlement of a proportion of the shortfall in assets, but of a specific amount . Furthermore, insofar as the judgment of condemnation imposed separate sentences on the three managers without joint and several liability, and the judgment approving the settlement does not itself include any joint and several liability, the default of one of the co-defendants and the fact that the other, who has disappeared, has not paid the contribution for which he is liable, have no impact on the extent of the obligation of the manager who benefits from the settlement .

CA Toulouse, 2 July 2013, LawLex202300008665JBJ (LJ).

CA Lyon, 16 August 2018, LawLex202300008690JBJ (LJ).

Cass. com., 9 December 2020, LawLex202100006162JBJ (LJ); CA Saint-Denis de la Réunion, 7 September 2022, LawLex202300000486JBJ (LJ).

Cass. com., 15 March 2005, LawLex202100001819JBJ (LJ).

Cass. com., 5 November 2003, LawLex202100001817JBJ (LJ).

Cass. com., 2 November 2005, LawLex202100001822JBJ (LJ).

Cass. com., 24 March 2009, LawLex202100001828JBJ (LJ).

CA Aix-en-Provence, 10 May 2012, LawLex202300008534JBJ (LJ).

Bankruptcy Law

994. Authority to compromise

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994. Authority to compromise

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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