Bankruptcy Law

The date of cessation of payments may be postponed one or more times , but may not be more than eighteen months prior to the date of the judgment opening the procedure . The court may, without exceeding its powers or disregarding the object of the dispute submitted to it, postpone the date of cessation of payments to a date other than that recommended by the liquidator . On the other hand, the dat …

Postponement of the date of cessation of payments

The date of cessation of payments may be postponed one or more times , but may not be more than eighteen months prior to the date of the judgment opening the procedure . The court may, without exceeding its powers or disregarding the object of the dispute submitted to it, postpone the date of cessation of payments to a date other than that recommended by the liquidator . On the other hand, the date of cessation of payments may not be postponed to a date prior to that of a res judicata ruling which held that the debtor was not in cessation of payments on the date of the court's decision , nor to a date when the debtor company had not yet been registered .

The court hearing a request to postpone the date of cessation of payments must assess the situation not on the day of the ruling, but on the day at which the postponement is envisaged . In order to postpone the date of cessation of payments, the courts may rely on all the information contained in an expert's report, even if it does not constitute a judicial expert report, when it has been duly submitted to the debates and subjected to adversarial discussion . When postponing the date of cessation of payments of a group of companies, the court must note that the amount of assets available on the date it selects did not enable each of the companies to meet its current liabilities .

Postponement of the date of cessation of payments appears justified when it is established that, on the date initially set, the debtor benefited from a credit reserve enabling it to meet its current liabilities . Even in the absence of new facts, a request to postpone the date of cessation of payments may be made on the basis of a new analysis of elements already known, from which it emerges that the impossibility of meeting current liabilities with available assets was characterized at the proposed new date . The date of cessation of payments may be postponed to a date prior to that of the total adoption of cash services when it is established that the debtor has only been able to honour his payments up to this date with the help of artificial and illegitimate credit . On the other hand, the date of cessation of payments must be postponed to the day on which the creditor actually demands payment of a previously due claim .

The court may not postpone the debtor's date of cessation of payments to a date earlier than that initially set, without checking whether the debtor had sufficient assets available to meet the liabilities due on that date, such as liquid assets , a bank account with an available credit balance after the requested postponement date , or tax and social security moratoria and bank overdrafts . URSSAF and social security debt declarations, which show unpaid contributions by the debtor, and the first registrations of liens, are not sufficient to demonstrate that the debtor is unable to meet his current liabilities with his available assets on the requested deferment date .

Except in cases of fraud, Article L. 631-8 stipulates that the date of cessation of payments cannot be postponed to a date prior to the final decision approving an out-of-court settlement at the end of a procedure to prevent difficulties . On the other hand, the opening of a conciliation procedure in favor of the debtor does not prevent the date of cessation of payments from being postponed to an earlier date in the event of the procedure's failure . In such a case, the decision to open the debtor's conciliation procedure is not res judicata with regard to the date of cessation of payments .

Article L. 631-8(3)  provides that the matter may be referred to the court by the receiver, the liquidator or the public prosecutor. However, neither the partners , nor the commissioner for the enforcement of the plan , are entitled to request the postponement of the date of cessation of payments. The court makes its decision after hearing or duly summoning the debtor . The debtor alone is entitled to invoke the failure to comply with this formality . On the other hand, the former director, even if wrongly summoned to postpone the date of cessation of payments, does not have to be heard by the court, as he is no longer the legal representative of the company .

In the absence of any legal provisions providing for the form of the application to postpone the date of cessation of payments, the Court of Cassation took the view that the application was validly presented by way of a petition, and did not have to be made by way of a writ of summons . It now courts that, in the absence of a joint petition filed with tmanagerhe court registry, or voluntary presentation by the parties as evidenced by the signing of an official report , the debtor subject to an insolvency procedure, who has a right of his own to defend the action to postpone the date of cessation of payments, must necessarily be summoned . The manager of a company in insolvency procedure retains the power to represent the company until the closing judgment, and is therefore entitled to receive a writ of summons to postpone the date of cessation of payments, whether he or she is a natural or legal person . On the other hand, a claim for postponement of the date of cessation of payments is inadmissible where it is made against the director in a personal capacity , or against a former manager .

The application to change the date must be submitted to the court within one year of the judgment opening the procedure . A writ of summons to postpone the date of cessation of payments interrupts the statute of limitations. As a result, the date mentioned in the summons may be modified by the petitioner, by way of an additional request, until the court seized of the matter has reached a decision .

Lastly, Article R. 631-13  stipulates that the decision by which the court modifies the date of cessation of payments must be notified to the debtor and provided to the designated legal representatives, the public prosecutor and the departmental or, where applicable, regional manager of public finance of the department in which the debtor has its registered office and the department in which the debtor's principal place of business is located. The postponement decision is also published in accordance with Article R. 621-8, such as in the Official Bulletin of Civil and Commercial Announcements (BODACC) .

Cass. com. 29 September 2021, LawLex202100005433JBJ (LJ); 8 July 2003, LawLex202100004297JBJ (LJ), considering that the existence of a decision rejecting or inadmissible a first request to postpone the date of cessation of payments, even if it is res judicata, does not prevent the filing of a new request in this respect, since Article L. 631-8 of the Commercial Code authorizes multiple postponements.

C. com. L. 631-8, para. 2, applicable to the court-supervised liquidation procedure by reference to art. L. 641-1, IV. See for an application, Cass. com. 12 January 2022, LawLex202200000574JBJ (LJ), holding that a court of appeal which sets aside a judgment of judicial liquidation and pronounces the debtor's receivership may postpone the date of cessation of payments only up to eighteen months before its own judgment, which constitutes the judgment opening the insolvency procedure.

Cass. com., 12 May 2009, LawLex202100003725JBJ (LJ).

Cass. com., 28 April 1998, LawLex202100004134JBJ (LJ).

Cass. com., 24 March 2004, LawLex202100002063JBJ (LJ).

Cass. com, 13 November 2007, LawLex202100004287JBJ (RJ). See also Cass. com., 3 October 2018, LawLex202100004283JBJ (LJ), rejecting a request for postponement to a date earlier than that set by the court on the grounds that the difficulties invoked had been resolved by the following month.

Cass. com., 8 March 2017, LawLex202100004289JBJ (LJ).

Cass. com., 27 May 2014, LawLex202100004284JBJ (LJ).

Cass. com., 22 May 2013, LawLex202100001858JBJ (LJ).

Ibid. See also Cass. com., 14 May 2002, LawLex202100004301JBJ (RJ).

Applicable to the receivership procedure on reference from art. L. 641-1, IV.

Cass. com., 3 April 2019, LawLex202100001866JBJ (LJ).

CA Angers, 20 May 2014, LawLex202100005584JBJ (RJ).

Cass. com., 4 October 2005, LawLex202100001874JBJ (RJ).

Cass. com., 31 May 2016, LawLex202100004306JBJ (LJ).

Cass. com., 17 June 2020, LawLex202100004314JBJ (LJ).

Cass. com., 16 February 1999, LawLex202100001861JBJ (RJ).

Cass. com., 1 March 2005, LawLex202100001875JBJ (LJ).

Cass. com., 24 May 2005, LawLex202100004305JBJ (LJ) ; 22 March 2017, LawLex202100001878JBJ (LJ).

Cass. com., 12 June 2019, LawLex202100004307JBJ (LJ) ; 10 July 2019, LawLex202100004309JBJ (LJ) ; 3 October 2018, LawLex202100001868JBJ (LJ) ; 17 February 2015, LawLex202100004308JBJ (LJ).

Cass. com., 19 May 2015, LawLex202100001877JBJ (LJ).

Cass. com., 20 June 1995, LawLex202100004299JBJ (RJ).

C. com., art. L. 631-8, al. 4 see for an application, Cass. com., 27 November 2019, LawLex202100004310JBJ (RJ).

Cass. com., 28 January 2014, LawLex202100004312JBJ (LJ).

Applicable to the receivership procedure on reference from art. R. 641-1.

Cass. com., 15 May 1990, LawLex202100004322JBJ (RJ).

Cass. com., 1 February 2000, LawLex202100004296JBJ (RJ).

Cass. com., 5 October 2022, LawLex202200008642JBJ (LJ).

Cass. com., 15 February 2000, LawLex202100004235JBJ (LJ).

Cass. com., 8 June 1999, LawLex202100001808JBJ (RJ).

Cass. com., 9 May 2018, LawLex202100004274JBJ (LJ).

CA Basse-Terre, 28 March 2022, LawLex202200006451JBJ (LJ).

Bankruptcy Law

672. Postponement of the date of cessation of payments

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672. Postponement of the date of cessation of payments

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