Bankruptcy Law

Where the proposed plan fixes deadlines and remissions, the legal representative is required to obtain the agreement of each creditor who has declared its claim, either individually or collectively . If, on the other hand, the proposal relates to a conversion into securities giving or capable of giving access to capital, the legal representative may only obtain the agreement of each creditor decla …

Consultation with creditors

Where the proposed plan fixes deadlines and remissions, the legal representative is required to obtain the agreement of each creditor who has declared its claim, either individually or collectively . If, on the other hand, the proposal relates to a conversion into securities giving or capable of giving access to capital, the legal representative may only obtain the agreement of each creditor declaring its claim individually and in writing. The court may not approve the plan presented by the debtor without verifying that the creditors' agreement has been obtained in the required manner .

Proposals for the payment of debts must be sent by registered letter with acknowledgement of receipt to each creditor consulted who has declared his claim . The letter must specify the form chosen for the consultation and include a statement of the assets and liabilities, with a breakdown of privileged and unsecured liabilities, all the proposals relating to the payment of debts and an indication of the guarantees offered, and the opinion of the legal representative and the controllers, if any have been appointed. In the absence of these elements, the response period cannot run .

In the event of individual consultation, the letter contains a reproduction of the provisions of the first two sentences of the second paragraph of Article L. 626-5, which specify in particular that failure to reply constitutes acceptance . In the event of collective consultation, the creditors are convened to an assembly chaired by the legal representative, at which the receiver gives them a report on the status of the procedure and the conditions under which the debtor has been able to continue its business since the proceedings were opened, and obtains their agreement in writing to any proposals relating to deadlines and remissions . Where the creditors have been duly consulted, they do not have to be consulted again on the proposals made by the debtor in its appeal submissions  or where, having refused the deadlines and remissions proposed by the debtor, the court imposes uniform payment deadlines on them .

The law and case law also identify several cases in which consultation of creditors ab initio is waived. Pursuant to Article L. 626-5(4) the legal representative is not required to consult creditors whose situation will not be affected by the plan, i.e. those for whom the draft plan does not change the terms of payment or provides for full payment in cash as soon as it is approved or as soon as their claims are admitted . The Court of Cassation also considers that it is not mandatory to consult a creditor about a debt write-off provided for in the preparation of a plan if the write-off does not affect the creditor . Furthermore, according to the case law, consultation with the creditor is only essential when the court is considering adopting the continuation plan and not when the court rejects it out of hand . This is the case when the proposed continuation plan does not take account of all the debtor company's liabilities, is based on utopian growth in turnover and therefore appears unworkable . Similarly, a debtor who proposes to sell the real estate that constitutes his only asset in order to pay off his liabilities must be considered unable to propose a continuation plan, so that there is no need to consult the creditors . However, where the creditors have not been consulted on the proposals contained in the plan for the continuation of the business, no decision can be taken on the plan .

C. com. L. 626-5, applicable to the receivership procedure by reference to art. L. 631-19.

Cass. com., 22 May 2007, LawLex202200006042JBJ (RJ).

CA Versailles, 20 January 1994, LawLex202100005317JBJ (RJ).

Cass. com., 25 March 1997, LawLex202200004083JBJ (RJ).

Cass. com., 4 January 2000, LawLex202200004104JBJ (RJ).

CA Paris, 22 March 1988, LawLex202200004077JBJ (RJ).

C. com. R. 626-7, applicable by reference from art. R. 631-34-4.

Cass. com., 14 November 2019, LawLex202100001735JBJ (S).

C. com. L. 626-5, para. 2: “Where the proposal relates to deadlines and discounts, the legal representative must obtain, individually or collectively, the agreement of each creditor who has declared his or her claim in accordance with Article L. 622-24. In the event of written consultation, failure to respond within thirty days of receipt of the letter from the legal representative shall be deemed to constitute acceptance [...]”.

C. com. R. 626-8, applicable by reference to art. R. 631-34-4.

Cass. com., 10 July 1990, LawLex202200004073JBJ (RJ) ; 6 February 1996, LawLex202200004106JBJ (RJ).

Cass. com., 6 February 1996, cited above.

See for an application, CA Lyon, 13 May 2015, LawLex202100005316JBJ (RJ).

Cass. com., 26 March 2013, LawLex202100003104JBJ (RJ).

Bankruptcy Law

554. Consultation with creditors

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554. Consultation with creditors

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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