Bankruptcy Law

Pursuant to Article L. 642-7 of the Commercial Code , the court determines the leasing, rental or supply contracts for goods or services necessary to maintain the business in the light of the observations of the debtor's co-contractors sent to the legal representative or the receiver where one has been appointed. The judgment adopting the plan entails the assignment of these contracts, even when t …

Characteristics of assigned contracts

Pursuant to Article L. 642-7 of the Commercial Code , the court determines the leasing, rental or supply contracts for goods or services necessary to maintain the business in the light of the observations of the debtor's co-contractors sent to the legal representative or the receiver where one has been appointed. The judgment adopting the plan entails the assignment of these contracts, even when the assignment is preceded by the management lease provided for in Article L. 642-13. Where there is disagreement between the parties as to the value of the asset covered by the leasing contract, the court must set this value, if necessary after an expert appraisal, in the assignment plan or, failing this, at the request of one or other of the parties .

The aim of the plan is to maintain the business transferred to the transferee by transferring current contracts  entered into by the debtor company . Where a contract is no longer in force, the transferee may, with the agreement of the other party, waive termination and take over the contract . Any contract that is necessary to maintain the business must be transferable. This is the case for a contract between a doctor and a clinic that has been sold to a third party as part of a disposal plan, where the judgment adopting the plan has ordered that “contracts with practitioners be maintained as far as possible” . On the other hand, the court may not require the buyer to assign a leasing contract, the performance of which would worsen the commitments made by the buyer during the preparation of its offer, which did not mention taking over the contract .

Can the debtor's co-contractor argue that the contract is intuitus personae in order to avoid transfer? Case law has been very inconsistent on this issue. While the courts agree that the transfer of the franchise agreement to the franchisor is enforceable against the franchisor in the context of a disposal plan, even in the presence of an intuitus personae clause or a preferential right , the solutions are more uncertain when the procedure is initiated against the franchisor. The courts initially took the view that the franchise agreement could be assigned to the transferee , but then reversed this solution, holding that the franchise agreement must be considered an intuitu personae agreement, which cannot be assigned to the franchisor's transferee in the absence of the franchisee's agreement . However, to avoid this solution, it is now common practice to insert an intuitus personae clause in the franchise agreement in favor of the franchisor alone, allowing the transfer of the agreements to the franchisor's transferee in the event of a voluntary or judicial transfer of the agreements . These latter solutions bring the franchise regime into line with that of the dealer contract, for which the courts have long held that even when concluded intuitu personae, the contract may be included in a disposal plan if it appears necessary to maintain the business .

Lastly, since no provision relating to the disposal plan gives the court the power to require the owner to grant a rural lease on his land to the transferee , a rural lease cannot be transferred when the lessor has proposed that it be granted to a transferee of his own choosing . The fact that there are several rural leases to be assigned does not prevent priority being given to the lessees proposed by the lessors, provided that all the leasehold rights constitute the essential part of the farm that is the subject of the disposal . The court's derogatory power to award the lease to a lessee proposed by the lessor or, failing that, to any buyer whose offer has been accepted in accordance with the conditions set out in the Commercial Code provisions relating to the disposal plan, is reserved for the case of the transfer of an entity consisting essentially of the right to a rural lease .

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

C. com. R. 642-8, para. 1, applicable to the receivership procedure by reference to art. R. 631-40 C. com.

CA Lyon, 9 December 2014, LawLex201400001497JBJ (RJ); CA Limoges, 28 January 2019, LawLex201900000156JBJ (LJ).

CA Douai, 8 March 1990, LawLex202300004446JBJ (RJ), D., 1990, I.R., 87.

Cass. com., 14 March 2000, LawLex202300004415JBJ (RJ).

Cass. com., 30 November 1993, LawLex202300004422JBJ (RJ).

Cass. com., 9 June 1998, LawLex202300004494JBJ (RJ).

Cass. com., 28 April 1998, LawLex202300004464JBJ (RJ).

Cass. com. 9 February 2016, LawLex202200001183JBJ (RJ); 13 April 1999, LawLex202100001170JBJ (RJ), holding that the loan contract for funds fully remitted to the borrower before the opening of its insolvency procedure, which does not constitute a current contract, cannot be assigned under contracts necessary to maintain the business.

Cass. com. 10 July 2001, LawLex202300002723JBJ (RJ), considering that the guarantee concluded between the creditor and the debtor's guarantor cannot be assigned in the context of an assignment plan since it is not a contract of the debtor company.

CA Orléans, 20 February 2014, LawLex202300004927JBJ (RJ).

Cass. com., 27 October 1998, LawLex202300004412JBJ (RJ).

Cass. com., 15 December 2009, LawLex202100001161JBJ (RJ).

CA Paris, 23 January 2020, LawLex202000000104JBJ (RJ).

CA Versailles, 23 June 1988, LawLex200200005726JBJ (RJ).

CA Paris, 15 December 1992, LawLex200200005961JBJ (RJ) ; CA Versailles, 28 March 1996, LawLex200200005559JBJ (RJ) ; CA Orléans, 14 September 2000, LawLex200200005319JBJ (LJ).

Bankruptcy Law

599. Characteristics of assigned contracts

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599. Characteristics of assigned contracts

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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