Bankruptcy Law

Under the terms of Article L. 622-3 of the Commercial Code, applicable to the receivership procedure by reference from Article L. 631-14, even in the event of the appointment of a receiver, “the debtor shall continue to carry out acts of disposal and administration on his assets”. Paragraph 2 of the text uses the term “day-to-day management” to designate these acts, which the Court of Cassation as …

Definition and system

Under the terms of Article L. 622-3 of the Commercial Code, applicable to the receivership procedure by reference from Article L. 631-14, even in the event of the appointment of a receiver, “the debtor shall continue to carry out acts of disposal and administration on his assets”. Paragraph 2 of the text uses the term “day-to-day management” to designate these acts, which the Court of Cassation assesses in the light of the nature of the activity carried out by the debtor and the amount, if any, of the sums involved in carrying them out.

Orders for equipment placed by a company in insolvency procedure, which are necessary for the continuation of its business, constitute acts of management in connection with its commercial activity when they are of a habitual nature in terms of their number and average cost . Orders for goods to be sold as ready-to-wear clothing , the conclusion of a transport contract when the company's business is the transport of manufactured goods  or the conclusion of a preliminary contract for the reservation of two apartments by a real estate consultancy company  are also acts of day-to-day management, which the debtor can carry out alone, in view of his business activity. On the other hand, the debtor's one-year lease of 250 m² on the debtor company's premises does not qualify as an act of day-to-day management in view of its furniture manufacturing business .

The amount of the transaction is also an indicator of its “routine” nature. The conclusion of a mandate and a fee agreement with a lawyer cannot be classified as such when the agreed fees and expenses, which are particularly high, are such as to burden the debtor company's situation to the detriment of the other parties involved . Similarly, it has been ruled that the amount of sums incurred for management acts during the observation period, and which must be paid in this respect in priority to other claims, cannot exceed EUR 4,000 .

Irrespective of the debtor's activity and the cost of the act, taking out an insurance policy  or receiving a formal notice of default, as opposed to the constraint that may follow , are considered to be acts of day-to-day management that the debtor can carry out without assistance. On the other hand, the conclusion of an employment contract  or a one-year professionalization contract , or the insertion in a deed of sale of a penalty clause likely to aggravate the debtor's liabilities through the implementation of the stipulated penalty payment , do not constitute acts of day-to-day management.

Whether or not an act is considered to be part of day-to-day management also depends on the scope of the assignment entrusted to the receiver. Indeed, the signing of an agreement by the company's manager to audit the accounts of the debtor company cannot be considered as a simple act of day-to-day management, since it falls within the very substance of the mission of the receiver appointed to assist him .

Lastly, Article L. 622-3 of the Commercial Code stipulates that acts of day-to-day management performed by the debtor alone are deemed valid vis-à-vis third parties acting in good faith. A bank which was unaware of the restrictions placed on the debtor's powers by the judgment opening the insolvency procedure must be considered a third party acting in good faith, even if it was aware of the debtor's insolvency procedure .

Cass. com., 13 December 2017, LawLex202100005039JBJ (RJ). See also Cass. com., 13 September 2011, LawLex202100002255JBJ (RJ) holding that in view of the nature of the debtor's business, its workforce of over one hundred employees and the price of the two contracts in question, amounting to EUR  7,140,952.42 and EUR 941,862.69 respectively, the issue of a bill of exchange for the sum of EUR 60,000 constitutes an act of day-to-day management.

Cass. com., 11 June 1996, LawLex202100005031JBJ (RJ).

CA Douai, 26 January 2018, LawLex202200000706JBJ (RJ).

Cass. com., 4 October 2005, LawLex202100005041JBJ (RJ).

CA Versailles, 20 February 2018, LawLex202100005042JBJ (RJ).

Cass. com., 13 September 2011, cited above.

Cass. com., 9 January 2001, LawLex202100005030JBJ (RJ).

Cass. com. 27 November 2001, LawLex202100002254JBJ (RJ). See also. Cass. com., 22 May 2007, LawLex202100005032JBJ (RJ) considering that the signing of a reservation contract for apartments in a building, of which the debtor company was promoter, prior to the judgment which deprived its director of his powers of management and administration, constitutes an act of day-to-day management which the company director may validly perform alone.

Cass. com., 29 September 2015, LawLex202100002259JBJ (RJ).

Cass. com., 13 November 1997, LawLex202200000719JBJ (RJ).

Cass. com., 30 March 2010, LawLex202100002258JBJ (RJ).

Cass. 1re civ., 23 September 2003, LawLex202100005029JBJ (RJ).

Cass. com., 12 January 2010, LawLex202200000721JBJ (RJ).

Cass. soc, 17 October 2006, LawLex202100002257JBJ (RJ); 26 November 2015, LawLex202100002260JBJ (RJ) holding that the hiring of an employee for seventeen months, without the authorization of the receiver appointed by the court which opened the employer's receivership, does not constitute an act of day-to-day management ; 29 May 2013, LawLex202200000720JBJ (RJ), holding that the conclusion of a two-year fixed-term employment contract, without the authorization of the receiver appointed by the court to assist its manager in management, does not constitute an act of day-to-day management opposable to the insolvency procedure.

Bankruptcy Law

349. Definition and system

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Les notions juridiques connexes

349. Definition and system

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