Bankruptcy Law

Article L. 641-3(2) of the Commercial Code allows the bankruptcy judge, as an exception to the prohibition on payment of prior claims, to authorize the liquidator or receiver, where one has been appointed, “to pay claims arising prior to the judgment, in order to withdraw the pledge or the thing legitimately retained” .
In particular, the bankruptcy judge may authorize the withdrawal of a pledge o …

Payment for goods needed to carry on business

Article L. 641-3(2) of the Commercial Code allows the bankruptcy judge, as an exception to the prohibition on payment of prior claims, to authorize the liquidator or receiver, where one has been appointed, “to pay claims arising prior to the judgment, in order to withdraw the pledge or the thing legitimately retained” .

In particular, the bankruptcy judge may authorize the withdrawal of a pledge on a savings bond held by a bank . However, a pledge contract does not include the deposit of a sum with the Treasury accountant to ensure the recovery of the Treasury's debt .

The payment of a prior claim may also be authorized by the bankruptcy judge in order to withdraw a thing legitimately withheld when the retaining creditor has declared his claim as a liability in order to make his right of retention enforceable against the insolvency procedure . However, the lender cannot invoke his right of retention on administrative documents to obtain the proceeds of the sale of the debtor's vehicles if he has not entered his pledge in a special register . A creditor holding a fictitious lien on a debtor's vehicle may suspend the release of the pledge until the proceeds of its sale have been allocated to him, even in the case of super-privileged wage claims . On the other hand, the bankruptcy judge may not authorize the creditors' representative to withdraw pledged assets in settlement of the debt owed by the debtor to the creditor holding a pledge on plant and equipment, since the pledge does not confer any right of retention . Lastly, guarantors may ask to be relieved of their obligation when the creditor, who holds a right of retention, has voluntarily relinquished the item in favor of the debtor, in order to take action against them .

Article L. 641-3(2) adds that payment of a prior claim may also be authorized to exercise the purchase option on a leasing contract. This exception to the prohibition on the payment of prior claims was introduced by the Ordinance of 18 December 2008  in order to reverse the case law which had held that the bankruptcy judge could not, in order to oppose the restitution of an asset which was the subject of a leasing contract, order the liquidator to exercise the option and authorize him to pay any outstanding instalments prior to the opening judgment . The bankruptcy judge may now authorize such a payment, but this power does not allow him to derogate from the clause in the leasing contract setting the lease term, at the end of which the lessee has the option of exercising the purchase option .

In accordance with Article L. 642-20-1, in the absence of withdrawal of the pledge or of the thing legitimately retained under the conditions provided for in the second paragraph of Article L. 641-3, the liquidator must, within six months of the judgment of court-supervised liquidation, request authorization from the bankruptcy judge to proceed with the transfer. The liquidator notifies the creditor of the authorization fifteen days before the transfer. The pledgee, even if not yet admitted, may apply to the bankruptcy judge for judicial attribution prior to realization. If the claim is rejected in whole or in part, he must return the asset or its value to the liquidator, subject to the admitted amount of his claim. In the event of sale by the liquidator, the right of retention is automatically applied to the price. Any registration made for the preservation of the pledge is cancelled at the liquidator's request.

See, for example, Cass. com, 7 July 2009, LawLex202200000788JBJ (RJ), ruling that the bankruptcy judge cannot authorize the payment of claims predating the opening of the insolvency procedure in the absence of any withdrawal of a pledge or a thing legitimately retained by the creditors.

Cass. com., 11 May 1999, LawLex202200000782JBJ (RJ).

Cass. com., 18 March 2014, LawLex202100001596JBJ (LJ).

Cass. com., 27 October 1998, LawLex202100002695JBJ (LJ).

Cass. com., 20 May 1997, LawLex202200001877JBJ (LJ).

Cass. com., 23 April 2013, LawLex202100001594JBJ (LJ).

Cass. com., 15 October 1991, LawLex202100001591JBJ (LJ).

Cass. com., 4 January 2005, LawLex202100001590JBJ (LJ).

Cass. com., 25 November 1997, LawLex202100001589JBJ (RJ).

Ordinance 2008-1345 of 18 December 2008 concerning the reform of the law governing distressed companies.

Cass. com., 19 June 2007, LawLex202100002268JBJ (LJ).

Bankruptcy Law

702. Payment for goods needed to carry on business

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702. Payment for goods needed to carry on business

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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