Bankruptcy Law

Article L. 654-2, 2° of the Commercial Code punishes the misappropriation or concealment of all or part of a debtor's assets through bankruptcy. The offense is committed when a manager sells the debtor's assets without consideration , or resells them personally and profits from their sale , concealing the proceeds from creditors . A manager is also guilty of bankruptcy if he overpays himself in vi …

Misappropriation of assets

Article L. 654-2, 2° of the Commercial Code punishes the misappropriation or concealment of all or part of a debtor's assets through bankruptcy. The offense is committed when a manager sells the debtor's assets without consideration , or resells them personally and profits from their sale , concealing the proceeds from creditors . A manager is also guilty of bankruptcy if he overpays himself in view of the debtor company's deteriorating financial situation , or if he makes withdrawals exceeding the amount of his partner's everyday account  and cashes sums intended for the company in his private bank accounts . Transactions carried out by the manager with the funds or assets of the debtor company for the benefit of other companies which he/she manages  or in which he/she holds an interest, either directly or through an intermediary , may also fall within the scope of Article L. 654-2, 2°.

Bankruptcy fraud through misappropriation of assets bears many similarities to the offense of abuse of corporate assets punishable under Articles L. 241-3 and L. 242-6 of the Commercial Code. Case law considers that the same facts can be classified as “abuse of corporate assets” for the period prior to the cessation of payments, and as “bankruptcy by misappropriation of assets” for the subsequent period. This is the case, in particular, when a manager, whose accounting training meant that he could not ignore the risks involved, issued cheques without indicating the addressee, in remuneration for fictitious employment contracts, benefiting third parties to whom he was attached by financial ties . Similarly, a manager who charges the company a salary for fictitious work carried out by his wife, and who abandons claims, without compensation or any serious guarantee of repayment, in favor of other group companies, is guilty of misuse of corporate assets and bankruptcy through misappropriation of assets . However, the comparison between the two offenses must adopt a similar approach: while the offense of misuse of corporate assets may be justified by the interests of the group within a group of companies, this excuse is not accepted in the case of bankruptcy .

The intentional element of the offense of misappropriation of assets is constituted by the discovery of part of the debtor company's assets at the manager's home, demonstrating a desire to conceal these assets from creditors . The same applies to a self-employed professional who, in bad faith, embezzles a sum forming part of his or her personal assets in order to avoid prosecution by his or her creditors, by failing to remit them to the judicial liquidation bodies .

Cass. crim., 3 October 1996, LawLex202200009140JBJ (LJ).

Cass. crim., 9 February 2022, LawLex202200002255JBJ (LJ).See also Cass. crim., 20 October 2004, LawLex202100002015JBJ (LJ).

Cass. crim., 23 May 2013, LawLex202100001896JBJ (LJ); 27 April 2000, LawLex202100002035JBJ (RJ).

Cass. crim., 30 November 1987, LawLex202100002772JBJ (LJ).

Cass. crim., 21 March 2018, LawLex202200000408JBJ (LJ).

Cass. crim., 29 mars 2000, LawLex202100002773JBJ (LJ). See also, a contrario, Cass. crim., 13 November 1989, LawLex202300008717JBJ, concerning a sole trader who had sold assets from his personal assets at a reasonable price and used the proceeds to pay creditors, without concealing the sale from the procedure.

Cass. crim., 18 June 1998, LawLex202100002008JBJ (LJ).

Cass. crim., 12 September 2018, LawLex202100001886JBJ (RJ). See also. Cass. crim, 5 March 2014, LawLex202100002022JBJ (LJ), considering that the withdrawals made from the coffers of a company which did not have, from the outset, the sums necessary to finance its working capital and to implement measures for the industrial redeployment of the acquired site, to cover expenses unrelated to its operation or reconversion, constitute the offence of bankruptcy by misappropriation of assets, insofar as they lack any serious economic cause with regard to the company's interests and have caused the company to cease payments; 3 October 1997, LawLex202100002007JBJ (LJ), for payments which were not proven to constitute reimbursement of sums advanced for a planned capital increase.

Cass. crim., 12 September 2018, LawLex202100001886JBJ (RJ). See also. Cass. crim. 8 March 2017, LawLex202300009047JBJ (LJ), sanctioning the cashing, by the manager, of a check intended for the debtor company on the account of a company managed by his brother; 20 April 2017, LawLex202100001891JBJ (LJ), for the cashing of a check corresponding, neither by its amount nor by its date, to a salary.

Cass. crim., 23 October 1997, LawLex202100002009JBJ (RJ); 5 August 1998, LawLex202200010837JBJ (LJ); 27 June 2018, LawLex202100001887JBJ (LJ).

Cass. crim., 11 May 1995, LawLex202200009139JBJ (LJ); 16 October 2019, LawLex202100001885JBJ (LJ).

Cass. crim., 14 December 2000, LawLex202200009269JBJ (LJ).

Cass. crim., 20 February 2008, LawLex202100002018JBJ (LJ).

Bankruptcy Law

1030. Misappropriation of assets

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1030. Misappropriation of assets

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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