Bankruptcy Law

In the judgement adopting the disposal plan, the court may, pursuant to Article L. 642-13 of the Commercial Code , authorize the conclusion of a management lease agreement , even if there is a clause to the contrary, in particular in the lease of the real estate, in favor of the person who has made the offer to acquire the business in the best conditions to ensure employment and the payment of cre …

Lease contract

In the judgement adopting the disposal plan, the court may, pursuant to Article L. 642-13 of the Commercial Code , authorize the conclusion of a management lease agreement , even if there is a clause to the contrary, in particular in the lease of the real estate, in favor of the person who has made the offer to acquire the business in the best conditions to ensure employment and the payment of creditors over the long term. The advantage of a management lease contract is that the transferee has time to familiarize himself with the business before the final sale, and has up to two years in which to finance the acquisition. On the other hand, for the company, it presents a risk of misappropriation of assets and know-how and opens up a two-year period of uncertainty about its future. This is why this transitional management method is strictly regulated by law .

The court can only reach a decision after very wide consultation, which includes the legal representative, the receiver where one has been appointed, the controllers, the person(s) appointed by the social and economic committee and any other interested parties. It must also obtain the opinion of the public prosecutor. Furthermore, a management lease contract, which is only possible as part of a receivership plan and not a continuation plan, in order to prepare the partial or total sale of the business, implies a commitment to acquire the business at the end of the lease . Under the terms of Article L. 642-15 , a provision of public policy, in the case of a management lease contract, the business must be effectively sold within two years of the judgment adopting the plan. The two-year period is a maximum: the transferee may not propose a seven-year management lease .

Article L. 642-16  provides that the receiver must be provided by the lessee-manager with all documents and information relevant to his mission. He must report to the court any damage to the assets held under a management lease contract and any failure by the lessee-manager to fulfil his obligations . On its own initiative or at the request of the legal representative or the public prosecutor, the court may order the resolution of the management lease and the cancellation of the plan . Consequently, a transferee who has been granted a two-month management lease pending signature of the deeds of assignment but who, during this period, fails to pay all the royalties due, must be evicted at the end of the contract . The debtor, who does not have the right to refer difficulties concerning the performance of the management lease to the court, is not one of the persons who may refer to the court an application for resolution of the management lease that may result in the resolution of the plan .

In addition, in accordance with Article L. 642-17 , if the lessee-manager fails to fulfil his obligation to acquire the business within the conditions and timeframe set out in the plan, the court, on its own initiative or at the request of the legal representative or the public prosecutor, must order the resolution of the management lease and the cancellation of the plan, without harm to any damages . However, if the lessee-manager can prove that he is unable to acquire the business under the conditions initially provided for for a reason not attributable to him, he may ask the court to modify these conditions, except for those relating to the amount of the price and the period provided for in Article L. 642-15 . The court must rule on this application before the expiry of the lease contract and after obtaining the opinion of the public prosecutor and hearing or duly summoning the legal representative, the receiver where one has been appointed, the controllers, the person or persons appointed by the social and economic committee and any interested person . This consultation only applies in the event that the lessee-manager requests a change in the terms of the sale and not in the event that the legal representative refers the matter to the court in order to establish that the tenant-manager has failed to acquire the business within the terms and deadlines set out in the plan and to request the resolution of the contract and the cancellation of the plan . Resolution of the sale plan is justified when the assignee has neither signed the management lease nor the deeds of sale, nor operated the business due to alleged acts of unfair competition by the debtor, against which it has taken no action .

Applicable to the receivership procedure on reference from art. L. 631-22 C. com.

Cass. com., 11 April 1995, LawLex200200005461JBJ (RJ), considering that a management lease of the business of a debtor in receivership may only be entered into, after the observation period, with the authorization of the court given in the judgment adopting the business sale plan.

CA Paris, 2 March 1990, LawLex202300004847JBJ (RJ).

See, for example, an isolated decision by the Court of Cassation holding that a transferee who, at the end of the management lease period, announces that he will not be able to buy back the debtor's assets must be ordered to implement the transfer plan he has proposed, by a judgment that constitutes a sale, Cass. com. 12 February 1991, LawLex202300004736JBJ (RJ).

CA Poitiers, 9 February 2016, LawLex202300004835JBJ (RJ).

However, art. L. 642-14 C. com. applicable to the receivership procedure on the basis of Art. L. 631-22, facilitates the use of management leases by providing that art. L. 144-7 of the Commercial Code, relating to the joint and several liability of the lessor of the business and the lessee-manager, does not apply.

CA Bordeaux, 24 February 1993, LawLex200200005980JBJ (RJ).

CA Versailles, 16 December 1987, LawLex202300004836JBJ (RJ).

Applicable to the receivership proceedings on reference from art. L. 631-22 C. com.

C. com., art. R. 642-21, applicable to the receivership procedure by reference to art. R. 631-40, al. 2 C. com.

C. com. L. 642-16, para. 2, applicable to the receivership procedure by reference to art. L. 631-22 C. com.

CA Aix-en-Provence, 26 November 2009, LawLex202300004833JBJ (RJ).

Bankruptcy Law

617. Lease contract

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

617. Lease contract

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