Bankruptcy Law

Article L. 620-1 of the Commercial Code requires that the debtor who applies for the opening of a safeguard procedure must not be in a state of suspension of payments. In other words, the debtor must not be unable to meet its current liabilities with its available assets . Indeed, the safeguard procedure cannot be opened when the debtor's state of suspension of payments is proven due to the existence of available assets that are less than the immediately due liabilities and the registrations of privileges . The debtor's current liabilities do not include claims that are the subject of a serious objection  and litigious claims, the contestation of which is still pending .

The absence of suspension of payments is assessed by the court on the day of the opening judgment of the safeguard proceedings , or, when the application is raised on appeal after the opening judgment has been annulled, at the time the court rules . A future credit cannot therefore be taken into consideration . The debtor must provide proof of the absence of suspension of payments by producing, in particular, his latest annual accounts, a cash flow statement, a statement of claims and debts, with an indication, by creditor and by debtor, of the total amount of the sums to be paid and recovered during a period of 30 days from the date of the application .

The judgment opening the safeguard proceedings, as well as subsequent judgments extending the observation period, do not have the authority of res judicata with respect to the condition of absence of suspension of payments, which is only presumed at the opening of the proceedings . Consequently, there is nothing to prevent the court subsequently seized of the matter from postponing the date of suspension of payments to a date subsequent to that of the opening of the safeguard proceedings . Consequently, a debtor who is in a state of suspension of payments on the day the court of appeal rules cannot request the opening of safeguard proceedings at this stage of the proceedings .

C. com. L. 631-1. For a more detailed study of the notion of cessation of payments See Part 3 - Title 1 - Chap. 1 - Sec. 2.

CA Paris, 2 October 2007, LawLex202100004354JBJ.

CA Aix-en-Provence, 13 November 2014, LawLex202100005582JBJ.

CA Paris, 7 February 2017, LawLex202100005100JBJ.

CA Poitiers, 11 May 2021, LawLex202100006026JBJ.

CA Paris, 3 May 2018, LawLex202100004513JBJ.

Cass. com., 26 June 1990, LawLex202100004247JBJ (RJ).

CA Aix-en-Provence, 10 May 2013, LawLex202100005098JBJ.

CA Grenoble, 24 March 2011, LawLex202100005258JBJ.

44. Proof of the absence of suspension of payments