Bankruptcy Law

Can the assignee take advantage of guarantees given by third parties on behalf of the debtor?
The Court of Cassation answers this question in the negative. In its view, the personal nature of the guarantee implies that the guarantor, who has undertaken to guarantee certain sums unpaid by the debtor, has not contracted an obligation to cover for the benefit of the transferee, whose solvency he was  …

Guarantors of loans granted to the debtor

Can the assignee take advantage of guarantees given by third parties on behalf of the debtor?

The Court of Cassation answers this question in the negative. In its view, the personal nature of the guarantee implies that the guarantor, who has undertaken to guarantee certain sums unpaid by the debtor, has not contracted an obligation to cover for the benefit of the transferee, whose solvency he was unaware of. It therefore considers that the guarantor is not obliged to guarantee new claims arising on the part of the transferee since the assignment, even if it remains liable for claims arising on the part of the debtor prior to the assignment . The lessor is therefore not entitled to claim from the debtor's guarantor the loss of earnings resulting from the re-letting of the equipment to the assignee at a lower rent, since this only affects rents subsequent to the assignment, which it does not guarantee .

However, the Court of Cassation adopts a different approach when the sums guaranteed by the security correspond to loan repayments. While the transferee of the business is obliged to pay the loan repayments subsequent to the transfer of the property financed, the debtor's guarantor remains obliged, under the same conditions as the debtor, to repay the loan in full, after deduction of the sums paid by the transferee, including the repayments due after the opening of the procedure . The courts have ruled that the guarantor of a loan granted before the opening of the procedure and the adoption of the sale plan is not discharged, insofar as the bank has not agreed to discharge the debtor from payment of the loan instalments from the date of the sale plan . Similarly, the debtor's guarantor is obliged to pay the outstanding instalments on the loan granted to the debtor by the bank, despite the transferee having taken possession of the business as soon as the transfer plan is pronounced, when the transfer has lapsed due to the non-fulfillment of one of its conditions . Furthermore, the debtor's joint and several guarantor is not discharged from guaranteeing repayment of loan instalments due to the bank, subsequent to the assignment plan, where it has not been established that the bank has agreed to waive part of its claim or to release the principal debtor and his guarantors from the part of the claim still outstanding at that date . The sale of equipment financed by a loan and pledged as part of a sale plan does not release the borrower's surety from the obligation to guarantee repayment of subsequent loan instalments due to the creditor .

Guarantors may nevertheless be discharged from their obligation, on the basis of Article 2314 of the Civil Code, when the creditor has committed a fault likely to deprive them of the benefit of subrogation. This is the case when the bank, by failing to register the pledge of the business, has prevented a collection which could certainly have been carried out without difficulty if it had done so , or when it has expressly waived it, depriving the guarantor of the benefit of subrogation . On the other hand, the creditor's fault preventing the guarantor from being subrogated to the benefit of the pledge securing the loan cannot result from the agreement reached with the assignee of the debtor company on the amount owed by the latter in respect of future instalments of the loan secured by the collateral . Nor does the loss of a pledge as part of a sale plan constitute a fault on the part of the creditor such as to release the guarantor from his or her commitment, where the court has approved the pledge without verifying the creditor's agreement . Similarly, the debtor's guarantor cannot claim to be discharged from his commitment to the bank through the latter's fault for failing to complete an amending registration of his privileged claim following the sale of the business pledged as part of the borrower company's sale plan, since the sale automatically transfers the guarantee, which is not lost . Lastly, since the assignment of contracts and assets encumbered by security interests does not entail novation of the obligation, guarantors can only take pre-payment action against the debtor they have guaranteed, and not against the assignee, the latter's co-debtor .

Cass. com. 12 October 1993, LawLex202100003332JBJ (RJ); Cass. crim. 21 November 1995, LawLex202100001910JBJ (RJ), holding that when a leasing contract, the performance of which is guaranteed by a surety bond, is assigned, the surety remains guarantor for rents due prior to the assignment, incurred by the assigned debtor, but not for subsequent rents due by the assignee, unless the latter gives an additional undertaking.

Cass. com., 13 February 2007, LawLex202300003819JBJ (RJ).

Cass. com., 13 May 2003, LawLex202300002569JBJ (RJ).

Cass. com., 7 July 2009, LawLex202100003080JBJ (RJ).

Cass. com., 27 February 2007, LawLex202300002570JBJ (RJ).

Cass. com., 8 January 2020, LawLex202200000297JBJ (RJ).

Cass. com., 9 February 2016, LawLex202200001183JBJ (RJ) ; Cass. crim., 9 February 2016, LawLex202100002053JBJ (RJ).

Cass. com., 20 April 2017, LawLex202300004452JBJ (RJ).

Cass. com., 29 September 2015, LawLex202100001172JBJ (RJ) ; 13 April 1999, LawLex202100001170JBJ (RJ).

Cass. com., 13 April 1999, LawLex202100001170JBJ (RJ).

Cass. com., 17 May 2011, LawLex202100003092JBJ (RJ).

Cass. com., 20 October 2021, LawLex202200000189JBJ (LJ).

Cass. com., 19 October 2010, LawLex202100003094JBJ (RJ).

Bankruptcy Law

905. Guarantors of loans granted to the debtor

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Les notions juridiques connexes

905. Guarantors of loans granted to the debtor

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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