Bankruptcy Law

Article L. 653-11 of the Commercial Code sets out a number of circumstances in which a manager may be relieved of the sanction imposed on him or her. On the one hand, a court ruling on the closure of a business due to the extinction of its liabilities, including after enforcement of a judgment against it under Article L. 651-2, restores all the rights of the individual debtor or the managers of th …

Lifting the sanction

Article L. 653-11 of the Commercial Code sets out a number of circumstances in which a manager may be relieved of the sanction imposed on him or her. On the one hand, a court ruling on the closure of a business due to the extinction of its liabilities, including after enforcement of a judgment against it under Article L. 651-2, restores all the rights of the individual debtor or the managers of the legal entity. It exempts or relieves them of all disqualifications, bans and ineligibility to hold elective public office.

The interested party may also ask the court to relieve him or her, in whole or in part, from the disqualifications and from holding an elective public office, if he or she has made a sufficient contribution to the payment of the liabilities. This is the case of a de facto manager who has been disqualified from managing the business, who has given his or her guarantee to the lessor for unpaid rents, and who has made payments out of his or her own personal funds . On the other hand, even if the manager has not been ordered to pay the company's debts, the court may, in rejecting a request to increase the sanction, point out the absence of sufficient contribution to the payment of the debtor company's liabilities , if the manager has simply staggered the repayment of his debt .

Since the adoption of the Law of 26 July 2005 , when the person concerned has been subject to the prohibition provided for in Article L. 653-8, he or she may be relieved of this prohibition if he or she provides all guarantees demonstrating his or her ability to manage or control one or more commercial or craft businesses, or any farm or legal entity. Thus, a person who has acquired training and experience , who has paid off his or her conviction for insufficiency of assets, who acknowledges having committed a fault by accepting to be a manager of convenience, who has demonstrated his or her ability to manage a business and whose skills have always been recognized , presents all the necessary guarantees and may be relieved of the sanction of prohibition from managing. Furthermore, a request to lift a management ban is admissible when it is justified by the economic needs of the debtor company, whose development is prevented by the measure .

Finally, where the disqualifications and incapacities are lifted in their entirety, the court's decision gives rise to rehabilitation .

The difference in treatment resulting from the impossibility of obtaining from a civil or commercial court, which has pronounced a management ban, its removal from the manager's criminal record, whereas criminal courts may do so, has however been deemed justified by the nature of this sanction and its conformity with the purpose of the law establishing it .

CA Paris, 22 March 2016, LawLex202200011101JBJ.

Cass. com., 24 May 2005, LawLex202300008740JBJ (LJ).

Cass. com., 3 November 1992, LawLex202300008741JBJ (x).

L. 2005-845 of 26 July 2005 on safeguarding companies.

CA Paris, 12 February 2009, LawLex202100001835JBJ (LJ).

CA Paris, 3 February 2011, LawLex202100001842JBJ (LJ).

CA Paris, 9 March 2017, LawLex202200011105JBJ (LJ).

Cass. com., 13 April 2022, LawLex202200010118JBJ (LJ).

Bankruptcy Law

1027. Lifting the sanction

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1027. Lifting the sanction

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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