Bankruptcy Law

The non-performance of the plan by the debtor does not automatically lead to its termination. This must be legally pronounced, even if the duration of the plan has expired . In order to justify the resolution, the default must continue at the date of the court's decision. This is not the case when, between the date of the referral and the date of the judgment, the debtor has paid the last instalme …

Characterization of the non-performance of commitments

The non-performance of the plan by the debtor does not automatically lead to its termination. This must be legally pronounced, even if the duration of the plan has expired . In order to justify the resolution, the default must continue at the date of the court's decision. This is not the case when, between the date of the referral and the date of the judgment, the debtor has paid the last instalment of the plan, which has consequently ended . The burden of proof that the debtor is not fulfilling the commitments of the plan and that the plan should be terminated lies with the commissioner for the execution of the plan . The latter has the choice of acting for the forced recovery of dividends or for the resolution of the plan for non-payment of dividends, without the admissibility of the action for resolution being subject to a prior formal notice .

What breaches are likely to warrant termination of the plan?

The Court of Cassation considers that the resolution of the plan may be justified by the debtor's late payment and its failure to respond to the letters of formal notice from the commissioner for the execution of the plan to justify the payment of the dividends provided for in the plan . This is the case, in particular, when dividends under the plan are paid late, the fifth dividend is not paid to two creditors subject to the plan and the debtors do not prove that they can repay the remaining two years of the plan . Similarly, the resolution of the plan is justified when the debtor's failure to meet its financial commitments is sufficiently serious, as it reveals its inability to pay the scheduled instalments of the plan alone and, consequently, the lack of viability of the business . The failure to pay the first instalment provided for in the plan cannot be justified by the absence of the filing of the final statement of claims, since only the sums to be distributed that correspond to disputed claims are to be paid only as of their admission to the liabilities . By virtue of the principle of uniqueness of the procedure, which results from the merger of the assets of two companies, the non-performance of the plan by one of them leads to its cancellation for both of them if the other refuses to pay the totality of the unpaid amount . Finally, the commissioner for the execution of the plan who finds that the debtor has not carried out the restructuring operations provided for in the continuation plan may, by way of a petition, request the cancellation of the plan .

On the other hand, the fact that the debtor no longer has the disposal of his business and is forced to cease his activity does not justify the cancellation of the plan, when he remains up to date with the payment of the dividends provided for in the plan and when the plan is strictly respected . Similarly, the failure of a SCEA (agricultural partnerships) to comply with its commitment to make mortgage assignments to guarantee the amount of the declared liabilities resulting from its continuation plan does not justify the cancellation of the plan at the request of a creditor who has been paid in full and who no longer has an interest in acting .

The failure to implement an increase in the share capital by incorporation of a current account receivable, as provided for in the continuation plan, does not justify the cancellation of the plan either, when it appears that such a transaction would represent a risk for the debtor . The application for resolution of the plan is not admissible either when the debtor respects the payment of the plan's deadlines, albeit according to different terms than those provided for in the plan .

Finally, the resolution of a plan for non-performance of commitments puts an end to the extension of the procedure resulting from the merger of the assets of a company and a natural person, which excludes the sale of the real estate assets of one to pay off the liabilities of the other, unless a new merger of assets is established . It also excludes the combination of their debts in the court-supervised liquidation subsequently opened against the former .

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Bankruptcy Law

272. Characterization of the non-performance of commitments

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272. Characterization of the non-performance of commitments

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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