Bankruptcy Law

The date of cessation of payments may be postponed one or more times , but under Article L. 631-8(2) of the Commercial Code, it may not be more than eighteen months prior to the date of the judgment opening the procedure . The court may, without exceeding his powers or disregarding the purpose of the dispute submitted to him, defer the date of cessation to a date other than that recommended by the …

Postponement of the date of cessation of payments

The date of cessation of payments may be postponed one or more times , but under Article L. 631-8(2) of the Commercial Code, it may not be more than eighteen months prior to the date of the judgment opening the procedure . The court may, without exceeding his powers or disregarding the purpose of the dispute submitted to him, defer the date of cessation to a date other than that recommended by the legal representative . On the other hand, the date of cessation of payments may not be postponed to a date prior to that of a res judicata ruling which held that the debtor was not in cessation of payments at the date of the court's decision , nor to a date when the debtor company had not yet been registered .

In order to postpone the date of cessation of payments, trial courts may rely on all the information contained in an expert's report, even if it is not equivalent to a legal expert's report, when it has been duly submitted to the debates and subjected to adversarial discussion . Postponement of the date of cessation of payments appears justified when it is established that, on the date initially set, the debtor benefited from a credit reserve enabling him to meet his current liabilities . Even in the absence of new facts, a request to postpone the date of cessation of payments may be made on the basis of a new analysis of elements already known, from which it emerges that the impossibility of meeting current liabilities with available assets was characterized at the new proposed date .

De facto, the date of cessation of payments can be postponed to a date prior to that of the total cessation of cash services, when it is established that the debtor has only been able to meet his payments up to that date with the help of artificial and illegitimate credit . Conversely, the date of cessation of payments must be postponed to the day when the creditor actually demands payment of a previously due claim .

On the other hand, postponing the debtor's cessation of payments date to a date earlier than the one initially set is not justified, if it is not determined whether the debtor had sufficient available assets to meet the liabilities due on that date, such as liquid assets , a bank account with an available credit balance after the requested postponement date , or tax and social security moratoria and bank loans . URSSAF (social security contribution collection office) and social security debt declarations, which show the debtor's unpaid contributions, and the first registrations of liens  are not sufficient to demonstrate that the debtor is unable to meet his current liabilities with his available assets on the requested deferment date.

Except in cases of fraud, Article L. 631-8 stipulates that the date of cessation of payments cannot be postponed to a date prior to the final decision approving an amicable settlement at the end of a procedure to prevent difficulties . On the other hand, the opening of a conciliation procedure in favor of the debtor does not prevent the date of cessation of payments from being postponed to an earlier date in the event of the procedure's failure . In such a case, the decision to open a conciliation procedure for the debtor is not res judicata with regard to the date of cessation of payment .

Article L. 631-8(3) specifies that the matter may be referred to the court by the receiver, the legal representative or the public prosecutor. Not covered by the text, neither the partners , nor the commissioner for the execution of the plan , are entitled to request postponement of the date of cessation of payments. The court makes its decision after hearing or duly summoning the debtor . The debtor alone is entitled to invoke the failure to comply with this formality . On the other hand, the former manager, even if wrongly summoned to postpone the date of cessation of payments, does not have to be heard by the court, as he is no longer the legal representative of the company .

In the absence of any specific wording on the form of the application to postpone the date of cessation of payments, the Court of Cassation took the view that the application was validly made by petition, and did not have to be made by writ of summons . It now holds that, in the absence of a joint petition submitted to the court registry, or of voluntary presentation by the parties as evidenced by the signing of minutes , the debtor subject to an insolvency procedure, who has a right of his own to defend the action to postpone the date of cessation of payments, must necessarily be summoned . The manager of a company in insolvency proceedings retains the power to represent the company until the closing judgment, and is therefore entitled to receive a writ of summons to postpone the date of cessation of payments, whether he or she is a natural or legal person . On the other hand, an application to postpone the date of cessation of payments is inadmissible where it is directed against the manager in a personal capacity , or against a former manager .

The application to change the date must be submitted to the court within one year of the judgment opening the procedure . A writ of summons to postpone the date of cessation of payments interrupts the statute of limitations. As a result, the date mentioned in the summons may be amended by the petitioner, by way of an additional request, until the court before which the case is brought has reached a decision .

Lastly, Article R. 631-13 stipulates that the decision by which the court amends the date of cessation of payments must be notified to the debtor and communicated to the designated legal representatives, the public prosecutor and the departmental or, where applicable, regional director of public finance of the department in which the debtor has its headquarters and the department in which its principal place of business is located. The postponement decision is also published in accordance with Article R. 621-8, such as in the Official Bulletin of Civil and Commercial Announcements (BODACC) .

Cass. com. 29 September 2021, LawLex202100005433JBJ (LJ); 8 July 2003, LawLex202100004297JBJ (LJ), considering that the existence of a decision rejecting or inadmissible a first request to postpone the date of cessation of payments, even if it has the force of res judicata, does not prevent the filing of a new such request, since Article L. 631-8 of the Commercial Code authorizes multiple postponements.

See, for example, Cass. com. 12 January 2022, LawLex202200000574JBJ (LJ), holding that a court of appeal which sets aside a judgment of court-supervised liquidation and pronounces the debtor's receivership may only postpone the date of cessation of payments up to eighteen months before its own judgment, which constitutes the judgment opening the insolvency procedure.

Cass. com., 24 March 2004, LawLex202100002063JBJ (LJ).

Cass. com, 13 November 2007, LawLex202100004287JBJ (RJ). See also Cass. com., 3 October 2018, LawLex202100004283JBJ (LJ), rejecting a request for postponement to a date earlier than that set by the court on the grounds that the difficulties invoked had been resolved by the following month.

Cass. com., 8 March 2017, LawLex202100004289JBJ (LJ).

Cass. com., 27 May 2014, LawLex202100004284JBJ (LJ).

Cass. com., 22 May 2013, LawLex202100001858JBJ (LJ).

Ibid. See also Cass. com., 14 May 2002, LawLex202100004301JBJ (RJ).

CA Angers, 20 May 2014, LawLex202100005584JBJ (RJ).

Cass. com., 4 October 2005, LawLex202100001874JBJ (RJ).

Cass. com., 3 April 2019, LawLex202100001866JBJ (LJ).

Cass. com., 31 May 2016, LawLex202100004306JBJ (LJ).

Cass. com., 17 June 2020, LawLex202100004314JBJ (LJ).

Cass. com., 16 February 1999, LawLex202100001861JBJ (RJ).

Cass. com., 1st March 2005, LawLex202100001875JBJ (LJ).

Cass. com., 24 May 2005, LawLex202100004305JBJ (LJ) ; 22 March 2017, LawLex202100001878JBJ (LJ).

Cass. com., 12 June 2019, LawLex202100004307JBJ (LJ) ; 10 July 2019, LawLex202100004309JBJ (LJ) ; 3 October 2018, LawLex202100001868JBJ (LJ) ; 17 February 2015, LawLex202100004308JBJ (LJ).

Cass. com., 19 May 2015, LawLex202100001877JBJ (LJ).

C. com., art. L. 631-8, al. 4 See for an application, Cass. com., 27 November 2019, LawLex202100004310JBJ (RJ).

Cass. com., 28 January 2014, LawLex202100004312JBJ (LJ).

Cass. com., 20 June 1995, LawLex202100004299JBJ (RJ).

Cass. com., 15 May 1990, LawLex202100004322JBJ (RJ).

Cass. com., 1st February 2000, LawLex202100004296JBJ (RJ).

Cass. com., 15 February 2000, LawLex202100004235JBJ (LJ).

Cass. com., 9 May 2018, LawLex202100004274JBJ (LJ).

CA Basse-Terre, 28 March 2022, LawLex202200006451JBJ (LJ).

Cass. com., 12 May 2009, LawLex202100003725JBJ (LJ).

Cass. com., 28 April 1998, LawLex202100004134JBJ (LJ).

Bankruptcy Law

331. Postponement of the date of cessation of payments

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331. Postponement of the date of cessation of payments

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