Bankruptcy Law

Under the terms of Article L. 631-19-1 of the Commercial Code, where the receivership of the company so requires, the adoption of the plan may be made subject, at the request of the public prosecutor, to a court decision declaring that the shares, equity securities or securities giving access to the capital held by one or more de jure or de facto managers may not be transferred. The court may deci …

Non-transferability of manager's shareholdings

Under the terms of Article L. 631-19-1 of the Commercial Code, where the receivership of the company so requires, the adoption of the plan may be made subject, at the request of the public prosecutor, to a court decision declaring that the shares, equity securities or securities giving access to the capital held by one or more de jure or de facto managers may not be transferred. The court may decide that the voting rights attached thereto shall be exercised, for a period to be determined by the court, by a legal representative appointed. It must rule after hearing or duly summoning the managers and the person or persons appointed by the social and economic committee.

The measure is linked to the status of de jure or de facto manager of the company. A shareholder, even a majority shareholder, whose de facto management of the company has not been established, may not be ordered to surrender his shares . Nor may it be ordered against three persons who together hold more than the majority of the company's share capital and of the votes on the supervisory board, and who thus have the power to dismiss the chairman of the management board, if this majority is not sufficient to establish that these three persons, together or separately and completely independently, exercise a positive management activity in the company .

The provisions of Article L. 631-19-1 of the Commercial Code, which have been subject to constitutional review, have not been found to be contrary to Article 1 of the First Additional Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms and Article 17 of the Declaration of the Rights of Man and of the Citizen of 26 August 1789, relating to the right of ownership, provided that they are justified by the pursuit of the public interest .

Under the terms of Article L. 631-10, the managers' equity securities or securities giving access to the capital are transferred to a special blocked account opened by the receiver in the name of the holder and kept by the company or the financial intermediary, as the case may be. No movements may be made on this account without the authorization of the bankruptcy judge. Where applicable, the receiver must have the non-transferability of the shares held directly or indirectly by the managers recorded in the registers of the legal entity. Where the manager is not expressly deprived of his voting rights, he may ask the receiver to issue him with a certificate enabling him to take part in the company's meetings. The special account is terminated once the decision ordering the transfer or lifting the non-transferability measure has become final .

Article L. 631-19-1(4) specifies that it is impossible to order the non-transferability of the manager's shareholdings when the debtor exercises a liberal professional activity subject to a legislative or regulatory statute. Similarly, it is not possible to prohibit the transfer of shareholdings under a plan adopted without the agreement of the classes of parties affected .

CA Montpellier, 5 November 2002, LawLex202200009534JBJ (RJ).

Cass. com., 12 July 2005, LawLex202100001612JBJ (RJ).

Bankruptcy Law

550. Non-transferability of manager's shareholdings

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550. Non-transferability of manager's shareholdings

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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