Bankruptcy Law

Safeguard proceedings are initiated by referral to the commercial court or the judicial court, depending on the debtor's activity. In order to encourage the settlement of the company's difficulties as early as possible, Article L. 620-1 of the Commercial Code reserves the initiative of the referral to the court solely to the debtor , contrary to the other procedures, which can also be opened upon  …

Debtor's exclusive right

Safeguard proceedings are initiated by referral to the commercial court or the judicial court, depending on the debtor's activity. In order to encourage the settlement of the company's difficulties as early as possible, Article L. 620-1 of the Commercial Code reserves the initiative of the referral to the court solely to the debtor , contrary to the other procedures, which can also be opened upon referral by the public prosecutor or upon summons by a creditor . If the debtor is a legal entity, this initiative is taken by its legal representative, who has sole discretion to determine whether or not the difficulties it is experiencing are insurmountable, since the opening of such proceedings remains a simple option. Nevertheless, the co-manager of a debtor company cannot alone request the opening of a safeguard procedure, because of the seriousness of such an act of management . In addition, when the debtor's situation does not reveal any difficulties that it would not be able to overcome, the court invites the debtor to apply to the president of the court for the opening of a conciliation procedure .

Even if the referral of the court in case of insurmountable difficulties is not compulsory for the debtor, he can be reproached, on the ground of civil liability, for not having taken the necessary measures to deal with these difficulties if they lead to the opening of a court-supervised liquidation procedure, closed for lack of assets. The debtor is thus indirectly encouraged not to let a difficult situation deteriorate.

The referral to the competent court must comply with a certain formalism: the content of the application is imposed and it is then published at the court registry seized in order to inform any interested party. Article R. 621-1 of the Commercial Code provides that the application to open safeguard proceedings “shall set out the nature of the difficulties that the debtor is experiencing and the reasons why he is unable to overcome them. It shall specify whether he undertakes to draw up the inventory under the conditions provided for in Article L. 622-6-1 as well as the time required to draw it up or whether he requests the designation by the court of a person responsible for drawing up the inventory pursuant to the sixth paragraph of Article L. 621-4.” The text then lists a certain number of documents that must accompany the request, such as the annual accounts for the last fiscal year, a cash flow statement, the number of employees at the date of the request, the name and address of the staff representatives... The documents attached must be signed, dated and certified as true and sincere by the debtor. If the debtor does not provide one of the required documents or if he provides it partially, he must justify it.

CA Nîmes, 31 October 2019, LawLex202200000502JBJ, excluding the statutory auditor from the referral initiative.

CA Metz, 17 April 2007, Gaz. Pal. 21 July 2007.

CA Paris, 23 September 2021, LawLex202100006028JBJ (S).

Bankruptcy Law

57. Debtor's exclusive right

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

57. Debtor's exclusive right

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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