Bankruptcy Law

If the debtor's payments cease during the implementation of the plan, a creditor, the commissioner for the enforcement of the plan or the public prosecutor may apply to the court for the plan to be wound up, after obtaining the opinion of the public prosecutor . In the event that the application is made by a creditor, it is not up to the debtor to prove his ability to meet the liabilities due with …

Assessment of available assets and current liabilities

If the debtor's payments cease during the implementation of the plan, a creditor, the commissioner for the enforcement of the plan or the public prosecutor may apply to the court for the plan to be wound up, after obtaining the opinion of the public prosecutor . In the event that the application is made by a creditor, it is not up to the debtor to prove his ability to meet the liabilities due with his available assets for the purpose of repaying the balance of the claim .

The Court of Cassation adopts a strictly accounting approach to the state of cessation of payments and requires the creditor to prove that the debtor can no longer meet the liabilities due with his available assets. It considers that, in the absence of available assets, a debtor who is unable to meet current liabilities of EUR 29,500 is in a state of cessation of payments despite the regularization of unpaid instalments . The accounting approach adopted by case law excludes consideration of behavioral factors. Indeed, cessation of payments is distinct from refusal to pay. Consequently, failure to comply with the plan or failure to pay a single registered claim does not in itself establish the debtor's cessation of payments in the absence of even a summary analysis of the assets available on the date of the court's decision . Similarly, late payment of a first instalment, partial payment of the second instalment, the appearance of new debts after the adoption of the plan, a deficit in operating profit and profit for the financial year, or the hypothetical nature of debt recovery, do not constitute elements capable of characterizing the debtor's state of cessation of payments on the day the court rules . Even if the debtor does not provide any evidence to show that it is possible to continue to pay the instalments due under the plan until their due date by means of its business activity without incurring new debts, nor any evidence to show that with its own funds it could pay off all of its debts, or that it could repay all of the instalments due under the plan and the new debts created due, the courts consider that it is not necessarily impossible for it to meet the liabilities due . The fact that the debtor has not fulfilled all his obligations, that the instalments provided for in the plan have not been paid for years, that the liabilities relating to the business can only be discharged through its sale, which is incompatible with the continuation of the business, and that the monthly instalments relating to a property loan or the payment of the outstanding capital that has become due have not resumed at the end of the moratorium granted by the creditors, is also not such as to characterize a cessation of payments .

Lastly, the voluntary intervention of a creditor in proceedings in which the debtor company is summoned to rescind its plan and to initiate court-supervised liquidation proceedings on the grounds that its payments have ceased while the plan is being implemented is inadmissible where the creditor does not prove that its claim is certain, liquid and due . A finding that payments have ceased is not a necessary condition for the opening of a new receivership procedure following the termination of the continuation plan .

C. com. L. 626-27, I and II, applicable to the receivership procedure by reference to art. L. 631-19

Cass. com., 23 September 2020, LawLex202100006267JBJ (RJ).

Cass. com., 8 March 2017, LawLex202100005332JBJ (RJ).

Cass. com., 2 June 2021, LawLex202100006258JBJ (RJ).

Cass. com., 29 April 2014, LawLex202100005327JBJ (RJ).

Cass. com., 11 December 2007, LawLex202100004202JBJ (RJ).

Cass. com., 8 January 2020, LawLex202100005329JBJ (RJ).

Cass. com., 26 February 2020, LawLex202100005330JBJ (S).

Cass. com., 23 May 1995, LawLex202100004432JBJ (RJ).

Bankruptcy Law

581. Assessment of available assets and current liabilities

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581. Assessment of available assets and current liabilities

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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