Bankruptcy Law

Before the Law of 25 January 1985 , creditors prior to the judgment opening the insolvency procedure were considered as a “mass”, which benefited from legal personality, and could, consequently, take legal action and have assets. The Law of 25 January 1985 replaced the mass of creditors with a mechanism of legal representation of the latter, which deprived them of the right to act for the reparati …

Collective interest criterion

Before the Law of 25 January 1985 , creditors prior to the judgment opening the insolvency procedure were considered as a “mass”, which benefited from legal personality, and could, consequently, take legal action and have assets. The Law of 25 January 1985 replaced the mass of creditors with a mechanism of legal representation of the latter, which deprived them of the right to act for the reparation of collective damages. The current Article L. 622-20 of the Commercial Code, which refers to the existence of an action on behalf of and in the public collective of the creditors, exercised by the legal representative, implies a compulsory representation of their interests. However, the text does not define the notion of collective interest. Case law has filled this gap by specifying that the collective damage, suffered by all the creditors and defended by the legal representative, is distinct from personal damage, suffered by one of them only and for which the latter may act alone . A liability action brought individually by a creditor cannot be declared inadmissible for the whole without the court distinguishing between the different types of damages invoked . Nevertheless, when an individual interest merges with the collective interest of the creditors , the action must be brought by the legal representative, who alone has the capacity to defend it.

The Court of Cassation was rather late in identifying the criterion of collective interest. It was only in 2015 that it established the principle that only actions aimed at the protection and reconstitution of the common pledge fall within the scope of the collective interest . Consequently, an action for liability brought by a partner or a manager, based on the damage resulting from the loss of the value of his share in the company's capital, is inadmissible since it only seeks to reconstitute the common pledge and since this damage, which results from the opening of the insolvency procedure, is not distinct from the damage suffered by the group of creditors, whose defense is ensured by the legal representative . A partner is not entitled to claim compensation for the financial loss resulting from the loss of his capital contribution, his partner's current account or his own funds, or even the share capital , as long as these claims relate to a fraction of the collective loss suffered by all the creditors and not to an exclusively personal loss  and as long as these losses are suffered indiscriminately and collectively by all the creditors . The partners are also not entitled to sue for damages for the loss of the business  or the depreciation of the business , since, in the first case, their action is aimed at reconstituting the collective pledge of the creditors and, in the second case, the loss is only a fraction of the collective loss suffered by all the creditors as a result of the reduction of the company's assets. In addition, the Court of Cassation first considered that a creditor who claimed the loss of the chance to be fully reimbursed by the debtor suffered an individual damage based on an interest distinct from that of the other creditors . It now considers that an action by which a creditor seeks to be compensated for the non-recovery of his claim tends to reconstitute the common pledge of the creditors . Similarly, the holder of a mortgage registered on the property of a debtor in insolvency proceedings who wishes to intervene voluntarily in the incidental real estate seizure procedure initiated by the latter  or the heirs of the debtor, joint and several guarantor of a loan taken out by the family real estate company (SCI), who are acting in settlement, in the hands of the legal representative, of the sums owed by the insurers under the death insurance policies taken out by their author , do not justify a personal interest, which is distinct from the collective interest of creditors.

On the other hand, creditors are admissible to act individually when they base their claim on a personal damage, distinct from the one suffered by the group of creditors. Firstly, the loss of an expected remuneration constitutes such damage. A company director or an individual entrepreneur placed in insolvency proceedings may claim compensation for the future loss of the remuneration that they could have received, since such a claim, unrelated to the protection and reconstitution of the common pledge of the creditors, does not fall within the monopoly of the legal representative . The loss of remuneration is the same as the loss of an additional price in the context of a share sale spread out over time . Secondly, a personal damage may result from the loss of an opportunity not to incur an expense. The case law accepts the admissibility of the action of a guarantor  or the parent company of a debtor, called in as a guarantee, based on the damage linked to the loss of a chance not to have to perform its commitments . A loss usually considered to be in the collective interest of creditors, such as the loss of a capital contribution or a current account, is also personal in nature when it is caused by the fault of a professional accountant or an executive of the debtor company. Thus, a shareholder or investor who seeks compensation for the loss of his or her contributions or investments is claiming a personal loss, distinct from the collective loss of the creditors and unrelated to the reconstitution of the common pledge, when this loss is not the result of the failure of the debtor company, but of the insincerity of the corporate accounts provided by its directors . Similarly, the transferee of shares in a company is entitled to sue the debtor company's chartered accountant for breach of his professional obligations if the loss he alleges due to the loss of the funds he advanced in a partner's current account is not the corollary of the loss suffered by all the creditors in the procedure but constitutes a loss that is exclusively personal and linked to the investment transaction he carried out . Finally, certain actions fall outside the monopoly of the legal representative because of the qualities of the person whose interests are being defended. Indeed, the action for compensation for damages invoked by the dismissed employees  and the ut singuli action exercised to defend the interests of the company  do not fall within the domain of actions on behalf of and in the collective interest of the creditors. Similarly, a tax collector who invokes a right of his own arising from the immediate attribution to him of a claim seized in the hands of the debtor's bank is admissible in his third-party opposition against a judgment which admits a set-off of the reciprocal debts of the two parties .

There is no need to consider whether the damage claimed is of a personal nature distinct from that of the creditors, as long as the plaintiff in the action does not establish the existence of a fault , such as the presentation of untrue annual accounts by the chartered accountant and the statutory auditor  or the fraudulent manoeuvres of the directors of the debtor companies . Finally, the absence of a personal prejudice distinct from that of other creditors of those who act in liability against the debtor in an insolvency procedure constitutes a public policy ground to bar the proceedings that the court may raise ex officio .

Law No 85-98 of 25 January 1985 on receivership and court-supervised liquidation of companies.

Cass. com., 4 October 2005, LawLex202100005544JBJ (LJ) ; 7 March 2006, LawLex202100002939JBJ (LJ) ; 21 November 2018, LawLex202100002953JBJ (LJ).

Cass, 1re civ., 3 February 2016, LawLex202100002951JBJ (LJ).

Cass. com., 11 October 1994, LawLex202100002938JBJ (RJ).

Cass. com., 28 June 2016, LawLex202100002941JBJ (LJ).

Cass. com., 21 November 2018, LawLex202100001066JBJ (LJ).

Cass. com., 10 January 2006, LawLex202100005602JBJ (LJ).

Cass. com, 8 September 2021, LawLex202200001925JBJ, 7 November 2018, (LawLex not found in English); 17 October 2018, LawLex202100002960JBJ (LJ); 29 September 2015, cited above; Cass. 1re Civ. 3 February 2016, cited above.

Cass. com., 14 June 2017, LawLex202100001545JBJ (LJ).

Cass. com., 17 October 2018, LawLex202100002960JBJ (LJ) ; 9 December 2008, LawLex200900000139JBJ(LJ).

Cass. com., 11 January 2005, LawLex202100002959JBJ (RJ).

Cass. com., 2 February 2022, LawLex202200001046JBJ (LJ). See already, Cass. com., 9 March 2010, LawLex202200001923JBJ.

Cass. com., 19 December 2018, LawLex202100002957JBJ (RJ).

Cass. com., 10 December 2013, LawLex202100002954JBJ (LJ).

Cass. com., 12 November 2020, LawLex202100006152JBJ (S).

Cass. com., 14 November 2000, LawLex202200001599JBJ (RJ).

Cass. com., 23 April 2013, LawLex202100005612JBJ (RJ).

Cass. com., 19 December 2018, cited above; 2 February 2022, cited above.

Cass. com, 16 January 2019, LawLex202100002943JBJ (LJ).

Cass. com., 16 October 2007, LawLex202100005603JBJ (LJ).

Cass. com., 2 June 2015, LawLex202100001543JBJ (RJ).

Cass. com, 18 January 2017, LawLex202100002955JBJ (RJ) ; 27 September 2017, LawLex202100002964JBJ(RJ) ; 27 November 2019, LawLex202100005616JBJ (LJ) ; 28 January 2014, LawLex202100005565JBJ (LJ) considering that the loss of value of the shares or units of a partner does not constitute a personal damage distinct from that suffered collectively by all the creditors as a result of the diminution or disappearance of that patrimony.

Cass. com., 23 November 2004, LawLex202100005614JBJ (LJ).

Cass. com., 29 September 2015, LawLex201500001189JBJ (LJ) ; 21 June 2016, LawLex201600001157JBJ (LJ) ; 5 June 2019, LawLex202100005615JBJ (LJ) ; 22 September 2021, LawLex202100005432JBJ (LJ).

Cass. com., 14 December 1999, LawLex202100005464JBJ (LJ).

Cass. com., 12 July 2017, LawLex202100002958JBJ (LJ).

Bankruptcy Law

113. Collective interest criterion

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113. Collective interest criterion

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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