Bankruptcy Law

A security trust agreement is a contract by which one or more settlors transfer property, rights or securities, or a set of property, rights or securities, present or future, to one or more trustees who, keeping them separate from their own assets, act for a specific purpose for the benefit of one or more beneficiaries . It constitutes an ongoing contract if the trustee has not yet performed his o …

Security Trust Agreement

A security trust agreement is a contract by which one or more settlors transfer property, rights or securities, or a set of property, rights or securities, present or future, to one or more trustees who, keeping them separate from their own assets, act for a specific purpose for the benefit of one or more beneficiaries . It constitutes an ongoing contract if the trustee has not yet performed his obligation to transfer the assets back to the beneficiary on the day of the opening judgment. The Ordinance of 18 December 2008  excludes it from the scope of Article L. 622-13 of the Commercial Code concerning the continuation of ongoing contracts. However, the regime of ongoing contracts applies to an agreement pursuant to which the debtor retains the use or enjoyment of property or rights transferred to a trust estate .

Because of its exclusion from the scope of the special rules relating to ongoing contracts, the receiver may not require the continuation of the security trust agreement, nor may he request its termination. The creditor may not put the receiver on formal notice to decide on the continuation of the contract, and the termination of the contract does not follow from the receiver's failure to respond to such a formal notice or from the creditor's non-payment following a decision to continue.

On the other hand, pursuant to Article L. 622-13, IV, the receiver, or failing that the debtor, may require the continuation of the agreement for the provision of assets or rights in the trust estate and the creditor may give him formal notice to take a decision on this request. The agreement is terminated ipso jure in the absence of a response from the receiver at the end of a period of one month from the date of the formal notice or in the absence of payment by the latter after having demanded its continuation. The receiver may also request the termination of the contract if it is necessary to safeguard the debtor and does not excessively harm the interests of the other party. In fact, depending on the usefulness of the goods made available, the receiver either continues the contract or requests its termination.

Ordinance No 2008-1345 of 18 December 2008 reforming the law on companies in difficulty.

Bankruptcy Law

109. Security Trust Agreement

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Les notions juridiques connexes

109. Security Trust Agreement

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise