Bankruptcy Law

Under the terms of Article L. 621-3 of the Commercial Code, "[t]he judgment opens an observation period of a maximum duration of six months which may be renewed once, for a maximum duration of six months, by a specially reasoned decision at the request of the receiver, the debtor or the public prosecutor. As in the case of receivership, the Safeguard Law ("loi de sauvegarde") provided that the pub …

Determining the length of the period of observation

Under the terms of Article L. 621-3 of the Commercial Code, "[t]he judgment opens an observation period of a maximum duration of six months which may be renewed once, for a maximum duration of six months, by a specially reasoned decision at the request of the receiver, the debtor or the public prosecutor. As in the case of receivership, the Safeguard Law ("loi de sauvegarde") provided that the public prosecutor could request an exceptional extension of the period of observation for an additional six months, i.e. eighteen months in total. The Ordinance of 15 September 2021  abolished this possibility for safeguard procedures opened as of 1 October 2021. From now on, the period of observation may not last longer than twelve months.

The court that exceptionally extends the observation period for a period not exceeding six months in the absence of a request from the public prosecutor or despite the latter's opposition does not commit an abuse of power . Indeed, exceeding the time-limits of the observation period and their exceptional extension, in the absence of a request from the public prosecutor, are not sanctioned . The expiration of the observation period of a safeguard procedure does not require the court to pronounce the opening of receivership or court-supervised liquidation proceedings for the company concerned, unless during the observation period the debts of the company have increased, the cash flow does not allow for the payment of social security charges, the continuation of the operation represents a risk for the employees and no safeguard, continuation or transfer plan has been proposed .

Ordinance No 2021-1193 of 15 September 2021 amending Book VI of the Commercial Code.

Cass. com., 13 December 2017, LawLex202100002187JBJ (RJ).

Cass. com., 10 June 2008, LawLex202100002188JBJ (RJ).

Cass. com., 6 October 1992, LawLex202100005902JBJ (RJ).

Bankruptcy Law

63. Determining the length of the period of observation

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63. Determining the length of the period of observation

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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