Bankruptcy Law

Unlike the safeguard debtor, who is encouraged to go to court before his difficulties lead to the cessation of payments by the assurance that he will not be dispossessed of his business, the reorganization debtor can be assisted, or even replaced, by a receiver.
Even in such procedure, the appointment of a receiver is not mandatory. This is the case when the procedure is initiated at the request o …

The manager's power of administration

Unlike the safeguard debtor, who is encouraged to go to court before his difficulties lead to the cessation of payments by the assurance that he will not be dispossessed of his business, the reorganization debtor can be assisted, or even replaced, by a receiver.

Even in such procedure, the appointment of a receiver is not mandatory. This is the case when the procedure is initiated at the request of a debtor with fewer than twenty employees and sales of less than three million euros . In the absence of a receiver, the provisions of Title III of Book VI of the Commercial Code, relating to the receivership procedure, apply, provided they do not conflict with Articles L. 627-1 to L. 627-4 of the Commercial Code relating to the safeguard procedure without a receiver, which are made applicable to the receivership procedure by reference to Article L. 631-21 .

In this case, the company is managed by its manager, who may in particular hire an employee, even without the authorization of the bankruptcy judge , and rectify employees' pay slips and employment certificates . In accordance with Article L. 631-21, he may also dismiss employees for economic reasons  and give notice of this measure . A debtor operating as a garage owner may also sell a vehicle .

Only the debtor, and not the legal representative, who represents only the creditors, can lodge an appeal against a judgment reclassifying a fixed-term employment contract as an open-ended contract . The debtor's pursuit of legal action on appeal requires neither the authorization of the legal representative nor that of the bankruptcy judge, without it being necessary to determine whether it is an act of day-to-day management .

Under Article L. 627-2 of the Commercial Code, “[t]he debtor shall exercise, with the assent of the legal representative, the option available to the receiver to continue current contracts and to request the termination of the lease pursuant to Articles L. 622-13 and L. 622-14”. This power cannot be exercised, even tacitly, without the assent of the legal representative , who cannot be held responsible for the continuation of an existing contract where the debtor has not consulted him beforehand . The debtor who, in consultation with the legal representative, exercises the power to continue an existing contract, must provide the promised service and pay his debt .

Under Article L. 627-3 of the Commercial Code, “[d]uring the observation period, the debtor draws up a draft plan with the possible assistance of an expert appointed by the court”.

The text adds that the debtor must inform the legal representative and the bankruptcy judge of the proposed settlement of liabilities, and provide information, consultations and communications. Finally, the debtor submits the draft plan to the court registry, on which the court takes a decision in the light of the bankruptcy judge's report .

C. com., art. L. 621-4, applicable by reference to art. L. 631-19; art. R. 621-11, applicable by reference to art. R. 631-16.

Cass. com., 5 February 2020, LawLex202100005164JBJ (RJ).

CA Paris, 25 June 2021, LawLex202200000701JBJ (RJ).

Cass. soc., 4 May 2011, LawLex202100005010JBJ (RJ). See also Cass. soc., 19 January 2011, LawLex202100005011JBJ (RJ) ; Cass. com., 21 September 2005, LawLex202100002256JBJ (RJ).

Cass. soc., 24 April 2013, LawLex202200003972JBJ (RJ).

Cass. com., 28 May 2002, LawLex202100005033JBJ (RJ).

CA Pau, 9 May 2019, LawLex202200000733JBJ (RJ).

CA Reims, 16 August 2016, LawLex202100005009JBJ (RJ).

CA Caen, 19 March 2020, LawLex202200000700JBJ (RJ). See also CA Caen, 9 April 2019, LawLex202200000699JBJ (S).

Bankruptcy Law

347. The manager's power of administration

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

347. The manager's power of administration

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