Bankruptcy Law

The receiver exercises the power to decide whether or not to continue a contract in the light of the provisional documents available to him. Article L. 622-13, II, paragraph 2, of the Commercial Code requires that he ensures that he will have the necessary funds to pay for the performance of the contract. Sums handed over to the legal representative as a result of the lapse of a distribution proce …

Existence of funds required for payments

The receiver exercises the power to decide whether or not to continue a contract in the light of the provisional documents available to him. Article L. 622-13, II, paragraph 2, of the Commercial Code requires that he ensures that he will have the necessary funds to pay for the performance of the contract. Sums handed over to the legal representative as a result of the lapse of a distribution procedure in progress at the opening of the insolvency procedure do not constitute funds within the meaning of this text, since they are not intended to finance the continuation of the business .

The text specifies that if it is a contract with performance or payment spread over time, the receiver shall terminate it if it appears to him that he will not have the necessary funds to fulfill the obligations of the following term. Prior to the Ordinance of 12 March 2014 , if the performance of an ongoing contract required the debtor to pay a sum of money, the payment had to be made in cash . The ordinance abandoned this rule, but only in the case of a safeguard procedure, because it caused the debtor to lose the benefit of the payment periods, acquired before the opening of the procedure, even though he was not in a state of cessation of payments (cessation des paiements), and thus dissuaded, to a certain extent, companies in difficulty from having recourse to these procedure. From now on, the receiver must simply ensure that he will have sufficient funds to pay the sums due without losing the benefit of the payment extensions that may have been granted to him.

The receiver may incur personal liability to the other party to the contract, on the basis of Article 1240 of the Civil Code, if he opts to continue a contract without having ensured that the debtor had sufficient cash resources to guarantee the payment resulting from the continuation of the contract . This liability must be assessed on the day on which he requires performance of the contract. This is the case when, at that date, he cannot be unaware of the structurally loss-making nature of the activity, the continuation of which can only generate new liabilities, even if this contract is necessary for the continuation of the activity during the observation period . On the other hand, the receiver, who obtains an extension of the period of reflection to decide on the continuation of the ongoing rental contracts, does not incur liability for non-payment of rent when the projected accounting elements provided by the debtor allowed him to expect sufficient cash flow and the co-contractor did not inform him of the unpaid installments . Similarly, he is not at fault for non-payment when he can legitimately estimate, at the date of the order, that the realization of the inventory would provide sufficient funds to settle all the debts , or when he decides to continue a contract in progress and, at the date of exercise of the option, the debtor's cash position was sufficient .

Cass. com., 17 November 2015, LawLex202100005090JBJ (RJ).

Ordinance No 2014-326 of 12 March 2014, reforming the prevention of business difficulties and insolvency proceedings.

See in particular Cass. com., 20 September 2017, LawLex202100002278JBJ (S).

Cass. com., 30 June 2009, LawLex202100005089JBJ (RJ) ; 6 July 1999, LawLex202100003240JBJ (RJ).

Cass. com., 2 November 2016, LawLex202100003241JBJ (RJ).

Cass. com., 16 January 2019, LawLex202100003245JBJ (LJ).

Cass. com., 21 March 2006, LawLex202100001108JBJ (LJ).

Cass. com., 5 April 2016, LawLex202100003244JBJ (RJ).

Bankruptcy Law

102. Existence of funds required for payments

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102. Existence of funds required for payments

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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