Bankruptcy Law

The Court of Cassation provides a strict framework for the exercise of the action for extension in time.
In the first place, only events occurring prior to the decision to open the insolvency procedure of one legal or natural person can justify its extension to another . Accordingly, facts which indicate a merger of assets and liabilities between two companies, which occur during the enforcement o …

Time frame for the action

The Court of Cassation provides a strict framework for the exercise of the action for extension in time.

In the first place, only events occurring prior to the decision to open the insolvency procedure of one legal or natural person can justify its extension to another . Accordingly, facts which indicate a merger of assets and liabilities between two companies, which occur during the enforcement of the receivership plan by discharge of the liabilities of one of them and before the opening of the court-supervised liquidation in respect of that company, which constitutes a new procedure, may justify the extension of the procedure to the other .

Secondly, the adoption of a plan in the main procedure  precludes its extension to another company. In fact, an insolvency procedure cannot be extended to another person on the basis of the merger of assets and liabilities after, in the main proceedings, the court has adopted a total  or partial  disposal plan or a continuation plan , even if the judgment is provisionally enforceable ipso jure .

Nor can an insolvency procedure be extended, on the basis of the merger of assets and liabilities, to another legal entity already subject to an insolvency procedure, where a disposal or continuation plan  has been adopted in the context of this procedure . Conversely, an insolvency procedure initiated against one company may be extended to another, which is also subject to an insolvency procedure, as long as no plan has yet been adopted in the context of this procedure .

A court-supervised liquidation procedure ordered after resolution of the safeguard or receivership plan, which constitutes a separate procedure, cannot be extended to another company on the basis of abnormal financial flows that took place before the opening of the first procedure , all the more so where a disposal plan has been adopted . An application to extend the procedure initiated against a company to its manager, after the resolution of the plan adopted in respect of the company alone, must be rejected in the absence of proof of the merger of their assets and liabilities since the judgment adopting the plan . On the other hand, there is nothing to prevent the court from extending the insolvency procedure of one company to another on the grounds of merger of assets and liabilities, as long as the procedure has not been closed , even if the assets of the first company have been sold in the meantime .

Cass. com. 28 November 2000, LawLex202100004128JBJ (LJ); 16 October 2012, LawLex202100004138JBJ (LJ). A contrario see Cass. com. 24 May 2005, LawLex202100004130JBJ (LJ); CA Paris, 7 September 2021, LawLex202100005672JBJ (LJ).

Cass. com., 30 March 2005, LawLex202100004140JBJ (LJ).

Cass. com., 17 May 2017, LawLex202100004139JBJ (LJ).

Cass. com., 16 October 2012, LawLex202100004141JBJ (LJ).

Cass. com., 15 March 2005, LawLex202100004176JBJ (RJ).

Cass. com., 11 July 1995, LawLex202100002130JBJ (LJ).

Cass. com., 13 November 2002, LawLex202100004143JBJ (LJ).

Cass. com. 22 October 1996, LawLex202100002133JBJ (RJ), holding that the receivership opened against one person cannot be extended to another after approval of the payment plan under the procedure already opened.

See in particular. Cass. com. 18 January 2005, LawLex202100004112JBJ (RJ); 28 November 2000, LawLex202100004144JBJ (RJ); 5 April 2016, LawLex202100001186JBJ (LJ), considering that the adoption of a plan for the total sale of the business prevents the extension of the debtor's collective procedure to a third party due to a merger of assets and liabilities; 27 September 2017, LawLex202100001187JBJ (LJ).

See in particular. Cass. com. 11 March 2020, LawLex202100004111JBJ (RJ), holding that a judgment adopting a plan for the partial disposal of a debtor's assets precludes the extension of its insolvency procedure to a third party on the grounds of merger of assets and liabilities or fictitiousness; 5 December 2018, LawLex202100001188JBJ (LJ).

Cass. com., 27 November 2001, LawLex202100002777JBJ (RJ).

Cass. com., 12 November 1991, LawLex202100002128JBJ (LJ).

Cass. com., 5 February 2002, LawLex202100002114JBJ (LJ).

Cass. com., 19 November 2003, LawLex202100002117JBJ (LJ).

Cass. com., 4 January 2000, LawLex202100004142JBJ (LJ).

Bankruptcy Law

645. Time frame for the action

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645. Time frame for the action

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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