Bankruptcy Law

Pursuant to Article L. 642-6 of the Commercial Code , a substantial change in the objectives and means of the plan may only be decided by the court, at the request of the transferee, which must be presented by way of a petition . The court makes its decision after hearing or duly summoning the legal representative, the receiver where one has been appointed, the controllers, the person or persons a …

Substantial change

Pursuant to Article L. 642-6 of the Commercial Code , a substantial change in the objectives and means of the plan may only be decided by the court, at the request of the transferee, which must be presented by way of a petition . The court makes its decision after 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, and after obtaining the opinion of the public prosecutor .

The court's authorization is only required for a change in the undertakings contained in the plan: the transferee may in fact sell the shares of the group being sold without seeking the court's approval, provided that it has not undertaken to retain them and that the transfer has not had the effect of depriving the company being sold of the financing provided for in the plan . Furthermore, only a substantial change in the objectives and resources of the plan may lead the court to amend the disposal plan. A request to cancel an assigned contract constitutes a substantial change in the means of the plan when the termination, subsequent to its adoption, of a distribution contract relating to complementary products affects the operating conditions of the economic entity being sold to such an extent that the contract becomes unnecessary for the maintenance of the business . A request by the transferee and its manager for a substantial amendment to the sale plan, with the aim of obtaining a right of substitution in favor of a third party, may be approved on condition that they both undertake to guarantee the proper enforcement of the plan . On the other hand, a request to extend the duration of the plan , to exclude certain contracts from the scope of the takeover with retroactive effect  or to transfer the employment contracts of employees of the debtor company to one of its subsidiaries  does not constitute a substantial change in the objectives and means of the plan. Furthermore, the court's amendment of the plan may not have the effect of substantially modifying the transferee's rights and obligations, so that such an application must be rejected .

Some trial courts take the view that the res judicata effect attached to the decision adopting the disposal plan means that any amendment to the plan must be justified by a factor that was new and unforeseeable at the time the plan was adopted . In accordance with this requirement, an application to amend the sale plan by the transferee who claims to have discovered the irregular situation of two of the employees taken over must be rejected since this situation existed prior to the plan . A request by the transferee to amend the plan in order to convert the leasing contracts transferred into another contractual form cannot be approved either if it is not based on new information that has come to light since the transfer plan was adopted . However, as the Court of Cassation has not ruled on this issue, other trial courts have pointed out that Article L. 642-6 of the Commercial Code does not require a new event to have occurred .

Furthermore, Article L. 642-6(3) specifies that the amount of the sale price as set in the judgment adopting the plan may not be amended, so that the transferee may not request a reduction in the sale price, even if a significant number of contracts included in its takeover offer were not ultimately sold  or if an asset turns out not to exist . The transferee cannot circumvent the prohibition on modifying the transfer price, which is intangible and not subject to adjustment, by claiming compensation between the value of the assets taken over and the value of items that would have been resold before the transferee took possession . The court will be abusing its powers if it agrees to reduce the sale price of stocks, which is a component of the overall sale price . On the other hand, it may authorize the sale of assets not included in the original partial disposal plan, in order to increase its economic efficiency, provided that this change does not have the effect of modifying the price initially set, since it involves the transfer of different items .

Pursuant to Article L. 661-6, IV of the Commercial Code, judgments amending the sale plan or rejecting a request to do so may only be appealed by the public prosecutor or the assignee . Neither secured creditors  nor the assignees  are entitled to appeal against a judgment amending the disposal plan or to lodge a third-party objection against it. An appeal in cassation is only available to the public prosecutor , and not to the assignee , under pain of abuse of power . Such an appeal is not available to the transferee if the court refuses to grant an application to amend a financial commitment entered into under the disposal plan, on the grounds that this would result in a prohibited change to the sale price , or excludes from the scope of the sale various leasing contracts that had been sold .

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

C. com. R. 642-5, para. 1, applicable to the receivership procedure by reference to art. R. 631-40 C. com.

CA Amiens, 18 June 2015, LawLex202300004953JBJ (RJ).

CA Paris, 7 July 2022, LawLex202300004951JBJ (RJ).

CA Douai, 26 October 2017, LawLex202300004926JBJ (RJ).

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

Cass. com., 15 March 2005, LawLex202300004921JBJ (RJ).

Cass. com., 15 November 2016, LawLex202300003802JBJ (RJ).

Cass. com., 22 May 2013, LawLex202300004929JBJ (RJ).

Cass. com., 26 November 2002, LawLex202300004920JBJ (RJ).

CA Rouen, 27 April 1989, LawLex202300004933JBJ (RJ).

Cass. com., 3 May 2006, LawLex202300002291JBJ (RJ) ; CA Lyon, 14 May 2009, LawLex202300004923JBJ (RJ) ; CA Bourges, 21 July 2011, LawLex202300004954JBJ (RJ).

C. com. R. 642-5, para. 2, applicable to the receivership procedure by reference to art. R. 631-40 C. com.

Cass. com., 8 June 1993, LawLex202100001802JBJ (RJ).

Cass. com., 29 April 2003, LawLex202300004924JBJ (RJ).

Cass. com., 6 July 2010, LawLex202300004931JBJ (RJ).

CA Paris, 19 October 2010, LawLex202300004928JBJ (RJ), holding that the substitute assignee may appeal to the Court of Cassation if the court oversteps his powers by authorizing an amendment to the sale plan that has the effect of relieving the initial assignee of the guarantees and obligations arising from the plan, by transferring all of the transferred business assets to a third party.

Cass. com., 3 May 2006, LawLex202300002291JBJ (RJ).

Cass. com., 19 May 2021, LawLex202300004932JBJ (RJ).

CA Paris, 2 July 2009, LawLex202300004955JBJ (LJ).

CA Paris, 18 May 1989, LawLex202300004919JBJ (RJ).

Cass. com., 23 November 2004, LawLex202200004676JBJ (RJ).

CA Aix-en-Provence, 4 February 2022, LawLex202300004925JBJ (RJ).

Cass. com., 11 April 2018, LawLex202300003801JBJ (RJ) ; CA Toulouse, 27 July 2016, LawLex202300004952JBJ (RJ).

Bankruptcy Law

620. Substantial change

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620. Substantial change

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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