Bankruptcy Law

In matters of verification and admission of claims, Articles L. 624-3 and L. 624-3-1 of the Commercial Code distinguish two types of remedies, depending on the status of the parties to the dispute. The first is open to the creditor, the debtor or the legal representative, the second to “interested persons”.
1) Remedies of the creditor, the debtor or the legal representative
In accordance with Arti …

Remedies against decisions of the bankruptcy judge

In matters of verification and admission of claims, Articles L. 624-3 and L. 624-3-1 of the Commercial Code distinguish two types of remedies, depending on the status of the parties to the dispute. The first is open to the creditor, the debtor or the legal representative, the second to “interested persons”.

1) Remedies of the creditor, the debtor or the legal representative

In accordance with Article L. 624-3 of the Commercial Code, remedies against the decisions of the bankruptcy judge relating to the verification and admission of claims is open to the creditor, the debtor or the legal representative. This remedies concerns both the ordinances and the signature that the bankruptcy judge affixes to the statement of claims filed by the legal representative, provided that it gives this act the character of a legal decision . The delay for appeal by the parties is ten days from the notification to them of the contentious decisions , i.e. from the date of receipt of the notice informing them of the decision . This delay runs against a party only if the date of notification of the ordinance of the bankruptcy judge is certain for him .

The creditor's right to appeal against a decision to reject or admit only part of his claim is strictly limited. Indeed, pursuant to Article L. 624-3(2), a creditor whose claim has been discussed in whole or in part and who has not responded to the legal representative's request for explanations within the thirty-day period provided for in Article L. 622-27, may not remedy the decision of the bankruptcy judge when the latter confirms the proposal of the legal representative . On the other hand, the creditor has the right to remedy when the bankruptcy judge has not confirmed the proposal of the legal representative . Moreover, Article L. 622-27 specifies that the creditor may, despite the failure to respond within the thirty-day period, exercise a remedy against the ordinance of the bankruptcy judge if the discussion concerns the regularity of the declaration of claims. The Court of Cassation has adopted a broad reading of this text and allows a remedy to be exercised even if it concerns both the regularity of the declaration of claim and the amount of the claim .

Furthermore, under Article 553 of the Code of Civil Procedure, in the event of indivisibility with respect to several parties, an appeal against one party is only admissible if all are called upon to participate in the proceedings. This principle, which applies in matters of insolvency procedure, results in the inadmissibility of the creditor's appeal against an ordinance rejecting his claim , or only partially admitting it , or against the decision of the bankruptcy judge noting the existence of an ongoing proceeding , when he has not summoned the debtor, who has a right of his own in the matter of verification of liabilities, but only the legal representative. On the other hand, in the context of the safeguard procedure, the legal representative does not have to be summoned on the appeal of a creditor who contests the rejection of the claim that he has made . 

As with the creditor's right of appeal against the bankruptcy judge's admission ordinance, the debtor's right of appeal is subject to an important precondition. The debtor must have notified the legal representative of his contestation of the claim, at the stage of the verification procedure, in order to put the bankruptcy judge in a position to rule on it. This requirement has been the source of several difficulties, as some debtors have tried to argue that they were unable to participate in the verification of claims procedure because they were not invited to do so. Case law has been both conciliatory and severe in the face of this type of claim. On the one hand, it considers that a debtor who appeals the statement of claims within ten days of its publication in the BODACC (Official bulletin of civil and commercial announcements) cannot be forced to prove that he was not invited by the legal representative to the verification of claims, since such proof is impossible . But on the other hand, it considers that the debtor who was not invited to the verification of the claims can no longer question the statement of claims if he has not lodged an appeal to invoke the lack of adversarial nature of the procedure, within the legal time-limit, including by contesting the decision of the bankruptcy judge which puts an end to the mission of the legal representative . Moreover, once the debtor has been given the opportunity to participate in the verification of the claims, even in the person of an administrative and financial manager who has no power of representation , he may not appeal against the admission decisions entered on the statement of claims, even if the registry has mistakenly informed him of the existence of a remedy other than the claim . Nor is he entitled to lodge an appeal against the decision to admit a claim, even if the legal representative has omitted to mention the foreclosure of the statement of claim .

The debtor company retains, despite the possible appointment of a legal representative invested with a mission of assistance for all acts of management, the right to appeal itself against the decision of the bankruptcy judge to admit a claim to its liabilities . However, Article 553 of the Code of Civil Procedure requires that, when it lodges an appeal alone against the decision to admit a claim, it must notify not only the creditor, but also the legal representative, on pain of the lapse of its declaration of appeal, by serving its conclusions on the latter when the latter has not instructed a lawyer . The debtor cannot avoid this obligation by invoking an alleged community of interest with the legal representative . The debtor must respect the rules of the appeal procedure with respect to each of them , so that, as a party before the bankruptcy judge, the legal representative cannot be summoned to the appeal proceedings by way of a writ of forced intervention, reserved for third parties, but must be summoned by a new declaration of appeal .

Finally, an appeal in cassation lodged by the debtor against the ordinance of the bankruptcy judge who has given a final decision on the contestation of a claim is admissible, provided that the value of the claim in principal does not exceed the jurisdiction of the court which opened the procedure .

Article L. 624-3-1 of the Commercial Code opens a remedy to any interested party, excluding those mentioned in Article L. 624-3. The “complaint” presented against the statement of claims, referred to in Article L. 624-3-1, must, in accordance with Article R. 624-8, be made within one month of its publication in the BODACC.

A transferee of all or part of the assets  or a partner in the debtor civil law company  is deemed to be an interested person, who is required to exercise the remedy provided for in Article L. 624-3-1 and not in Article L. 624-3. A creditor may also constitute an “interested person” when he challenges not the conditions of admission of his own claim, but those applied to another creditor. However, in such a case, he must invoke a personal interest distinct from that of the other creditors in order to discuss the existence, the amount or the nature of the claim, and not his interest, in accordance with the public interest, in seeing the liabilities reduced and his chances of being paid increased . A creditor whose claim is admitted in competition with a tax claim and is given priority by the latter, whereas his right is exercised on the auction price of a business, which took place before the opening judgment, and which did not enter into the patrimony of the debtor, is justified by a personal interest distinct from that of the other creditors in raising a claim against the statement of claims .

The right to lodge a complaint against the statement of claims offered to interested persons may be exercised as soon as they are aware of the statement of claims and not necessarily from the publication in the BODACC of the notice of its deposit at the registry . In addition, persons who are co-obligated or who have granted a personal guarantee or who have assigned or transferred an asset as security, when they are sued, may not have the statement of claims set against them when they have not been notified of the admission decision provided for in Article L. 624-228 . In their case, the period of one month provided for lodging a claim runs from the date of notification .

Article R. 624-10 specifies that claims are made by application delivered or addressed to the registry. They must be indicated on the statement of claims by the court registrar. 

The remedy against the decisions of the bankruptcy judge on a claim must be brought before the court of appeal. In the event of an appeal, persons who are co-obligated or who have consented to a personal security interest or who have imputed or assigned a property as security that has not been called into the case may file third-party oppositions .

Pursuant to Article R. 624-5, interested third parties may also, within a period of one month from its transcription on the statement of claims, file a third-party objection against the decision rendered by the court having jurisdiction to rule on serious challenges raised against a claim, in favor of which the bankruptcy judge has released his jurisdiction. On the other hand, third-party proceedings against the judgment upholding the bankruptcy judge's decision to admit a claim are not open to the debtor's guarantor, who can only lodge a complaint against the statement of claims filed at the registry of the commercial court, as an interested third party, in accordance with the provisions of Article R. 624-8 of the Commercial Code .

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Finding that the thirty-day period is not excessively short and does not disproportionately affect the right of access to a court or to a judicial remedy, or the creditor's property right in the claim under discussion, as guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, V. Cass. com., 3 October 2018, LawLex202100002726JBJ (RJ).

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Bankruptcy Law

204. Remedies against decisions of the bankruptcy judge

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204. Remedies against decisions of the bankruptcy judge

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