Introduction

Existence of a claim

Issuance of enforcement order (writs of execution)

Existence of seizable assets or claims

Conditions of enforcement

Judicial authority

Other authorities

Competent authorities and persons

Operations

Difficulties in enforcement

Implementation of compulsory enforcement

General regime of enforcement procedures

Concept of penalty

Scope ratione personae

Material scope

Determination of penalty

Competence of judge

Powers of court

Effects of ruling ordering or rejecting penalty

Pronouncement of penalty

Substantive conditions

Procedural conditions

Role and powers of the judge

Effects of liquidation judgment

Liquidation of the penalty

Penalty

Conditions of implementation

Contesting the measures

Ordinary law on protective measures

Protective seizures

Judicial security interests (sûretés judiciaires)

Specific regimes

Interim protective measures (mesures conservatoires)

Seizure of claims for sums of money

Seizure of tangible movable property

Seizure of intangible rights

Enforcement measures on movable property

Real estate seizures

Evictions

Enforcement measures on real estate

Enforcement measures

5. Civil Enforcement Procedures

The general rules governing the seizure of intangible rights other than monetary claims  are established by reference to the rules applicable to the seizure of partnership rights and securities, which themselves largely refer to the rules of seizure and sale, insofar as the specificity of the rights in question does not preclude it .

The scope of regulation is broad. It first includes shareholders' rights, a concept that refers to the shares issued by partnerships such as civil companies , general partnerships, limited partnerships concerning general partners, and limited liability companies (SARL). However, some shares are not seizable: this is the case for industry shares, which are not transferable, shares issued by professional partnerships, and shares of professional civil companies of notaries, as the requirement for prior approval of the transferee by the Minister of Justice is incompatible with a forced sale . Securities, which are also covered, are defined in Article L. 228-1 of the Commercial Code as financial instruments that confer identical rights by category . Financial instruments, as defined in Article L. 211-1 of the Monetary and Financial Code, include equity securities issued by joint-stock companies, debt securities, and shares or units of collective investment undertakings. This category includes shares, bonds, or participating securities, unless they are declared unseizable due to their inalienability . Apart from shareholders' rights and securities, which constitute the main subject of the regime established by Articles L. 231-1 and following and R. 231-1 to R. 233-9 of the Code of Civil Enforcement Procedures, these texts are also intended to apply to intellectual property rights, such as copyrights, trademarks, or designs and models, except for patents, whose seizure is specifically governed by Articles L. 613-21 and R. 613-51 of the Intellectual Property Code . The Court of Cassation, when requested for an advisory opinion, also considered that operating licenses, such as the IV license for operating a beverage outlet, constitute seizable intangible rights . However, the rules of the Code of Civil Enforcement Procedures do not apply to the seizure of a business, which is subject to a specific regime defined by the Commercial Code in Articles L. 143-3 and following.

Like third-party seizure (saisie-attribution), seizures of intangible rights occurs within a tripartite relationship between the creditor, their debtor, and the company or legal entity issuing the shareholder rights or securities , the third party seized. When the accounts of registered securities are managed by an agent of the company, they are seized from this agent . Regarding bearer securities, their seizure is carried out with the authorized intermediary where the registration was made. Furthermore, if the holder of registered securities has appointed an authorized intermediary to manage their account, the seizure is carried out with the latter .

The creditor proceeds with the seizure by serving a judicial commissioner's act  which, under penalty of invalidity, indicates the name and domicile of the debtor or, if it is a legal entity, its name and registered office, the writ of execution under which the seizure is carried out, the breakdown of the amounts claimed in principal, costs, and accrued interest as well as the interest rates , stating that the seizure renders unavailable the monetary rights attached to all the shares or securities held by the debtor, and which demands disclosure of any existing pledges or seizures. The third party who does not comply with such a demand is only liable for damages and not for the payment of the causes of the seizure . Moreover, unlike the rules applicable to seizure-apprehension, this latter obligation does not impose any general duty of information on them. In particular, they cannot be blamed for not having declared to the seizing creditor the extent of the shareholder rights and securities held by the debtor , unless ordered by the enforcement judge .

The seizing creditor must then, within eight days and on pain of lapse, inform the debtor of the seizure by an act of a judicial commissioner . On pain of invalidity, this service must contain: a copy of the seizure report; a notice, in very conspicuous characters, that objections must be raised, on pain of inadmissibility, by a writ of summons notified by registered letter with acknowledgment of receipt to the judicial commissioner who carried out the seizure within one month following the service of the act, with the date on which this period expires; the designation of the enforcement judge of the debtor's domicile, competent to rule on the objection; a notice, in very conspicuous characters, that the debtor has a period of one month to proceed with the amicable sale of the seized assets under the conditions provided either in Article R. 233-3, or, if it concerns partnership rights or securities not admitted to trading on a regulated market or on a multilateral trading facility, in Articles R. 221-30 to R. 221-32; if the seizure concerns securities admitted to trading on a regulated market, the indication that in the event of a forced sale and until its completion, he may inform the third-party garnishee of the order in which they are sold; as well as the reproduction of Articles R. 221-30 to R. 221-32 and R. 233-3. If the debtor exercises his right to object, he must, on pain of inadmissibility, notify the objection on the same day or, at the latest, the next working day, by registered letter with acknowledgment of receipt, to the judicial commissioner who carried out the seizure, and inform the third-party garnishee by simple letter .

Unlike the saisie-attribution, the seizure of intangible rights does not result in the immediate transfer of these rights to the creditor but only renders the monetary rights attached to them unavailable . Therefore, it does not create any preferential right in case of competition with other creditors, even subsequent ones. Monetary rights include, notably for shares and securities, distributable profits , provided they have actually been distributed . The unavailability established by Article R. 232-8 also opposes the donation of the bare ownership of the debtor's shares, subsequent to the seizure . To avoid the disadvantages of this unavailability, which is not limited to the amount of the debt, the debtor can obtain the release of the seizure by depositing a sufficient sum with the Caisse des dépôts et consignations to satisfy the creditor. This sum is specifically allocated for the benefit of the seizing creditor .

After the seizure operations, the sale operations follow. Under Article R. 233-1, the compulsory sale is carried out, at the creditor's request, upon presentation of a certificate issued by the court registry or prepared by the judicial commissioner who conducted the seizure, certifying that no challenge was made within the month following the notification of the seizure or, if applicable, a judgment dismissing the challenge raised by the debtor. In the case of multiple seizures, only the seizing or opposing creditors who have come forward before the sale are allowed to assert their rights over the sale proceeds . Therefore, the proceeds of the sale can only be distributed among the creditors who initiated a seizure before the sale . However, if a protective seizure was carried out before the seizure that led to the sale, the creditor may participate in the distribution of the proceeds, but the amounts due to them are deposited with the Caisse des dépôts et consignations until they have obtained a writ of execution .

In addition to these general provisions, the Code of Civil Enforcement Procedures contains specific provisions for the sale of securities admitted to trading on a regulated market or on a multilateral trading facility, and for the sale of partnership rights and securities not admitted to trading on a regulated market or on a multilateral trading facility.

In the case of securities admitted to trading, greater flexibility is offered to the debtor to account for the security provided by the market mechanisms setting the price of the securities. The debtor can indeed initiate the amicable sale of the seized securities by ordering, within a month of the service made to them, the sale of their securities , without the creditor having the option to oppose it. However, the creditor's interests are protected because the proceeds of the sale are made unavailable in the hands of the authorized intermediary, to be specifically allocated to them. If the sums obtained are sufficient to satisfy the creditor, the unavailability ceases for the surplus of the seized securities. If, within a month of the service made to the debtor, the amicable sale has not taken place, the creditor may request a forced sale under the conditions provided in Article R. 233-1. Until the forced sale is carried out, the debtor may indicate to the garnishee the order in which the securities are sold. Failing this, no dispute is admissible regarding their choice .

In the case of shareholder rights or securities not admitted to trading on a regulated market or a multilateral trading facility, the rules are more complex, resembling the regime of seizure and sale, due to the absence of market mechanisms for determining the sale price and the strong intuitus personae existing in partnerships. In this context, an amicable sale remains possible, but according to the modalities of ordinary law seizure and sale , to which Article R. 233-5 expressly refers. In the absence of an amicable sale, the same text provides for a sale by auction. Regarding securities, Article L. 211-21 of the Monetary and Financial Code specifies that voluntary or compulsory public auctions of financial securities are conducted, if these securities are admitted to trading on a regulated market, by investment service providers who are members of the regulated market where these securities are traded and, otherwise, by an investment service provider or a notary. For shares, in the absence of specific texts, the Court of Cassation has clarified that, like any other public or ministerial officer, notaries are authorized to conduct the auction of shareholder rights .

The execution of the compulsory sale involves the prior drafting of a specification that recalls the previous procedure and includes the company's articles of association, any document necessary for assessing the nature and value of the rights being sold, and indicates the agreements establishing approval or creating a right of first refusal in favor of the partners, failing which these will not be enforceable against the successful bidder . To accommodate the partners' right of approval, it is customary to insert in the specification a condition subsequent for obtaining such approval or providing an option for the company or partners to repurchase the shares, the validity of which is recognized by case law . Furthermore, since in the matter of the sale of partnership rights and securities, no provision requires bidding through legal counsel, such a restriction cannot be included in the specification .

A copy of the specifications must be served on the company, which is responsible for informing the partners. On the same day, a demand is served, if necessary, on the other opposing creditors to review the specifications with the person in charge of the sale. Any interested party may submit observations on the content of the specifications to this person. These observations are no longer admissible after a period of two months from the notification to the company. The partners who wish to avail themselves of the right of substitution granted to them by Article 1867 of the Civil Code must inform the person in charge of the sale .

The publication indicating the day, time, and place of the sale is made through the press and, if necessary, by posters, no more than one month and no less than fifteen days before the date set for the sale. The debtor, the company, and, if applicable, the other enforcing creditors must be informed of the date of the sale by way of notification .

After the sale, pursuant to Article R. 233-9, the legal and conventional procedures for approval, preemption, or substitution are implemented in accordance with the provisions specific to each of them. The successful bidder thus incurs a significant risk of not being approved. In this case, the repurchase of their shares must be offered to them. The repurchase price, which may be subject to the determination procedure provided by an expert under Article 1843-4 of the Civil Code, may differ from that resulting from the auction, either upwards or downwards .

These are expressly excluded from the system by Art. L. 231-1 CPC exéc.

Annuling a seizure due to the absence of indication of the interest rate in the seizure report, Cass. 2e civ., 31 May 2001, LawLex202400003630JBJ.

Cass. 2e civ., 3 May 2001, LawLex202200010125JBJ.

Cass. 2e civ., 1 February 2001, LawLex202200010122JBJ.

Cass. 2e civ., 8 April 1999, LawLex202200010123JBJ, RJ com. 2000, 232, obs. LUCAS; D. 1999, 513, obs. MARTIN; 17 May 2001, LawLex202400003626JBJ, Dr. soc. 2002, No 12, obs. LUCAS.

See by analogy, regarding a protective seizure in this case, Cass. 2e civ., 21 June 2007, LawLex202300001791JBJ.

See, for SCPI shares, Cass. 2e civ., 8 December 2022, LawLex202200011480JBJ.

Cass. com., 13 September 2017, LawLex202200008861JBJ, in this case, the profits had been allocated to the retained earnings account.

Cass. 2e civ., 8 June 2023, LawLex202300008263JBJ.

Cass. 2e civ., 19 May 2022, LawLex202200011424JBJ.

Cass. 1re civ., 4 November 2003, LawLex202200011183JBJ.

Cass. 3e civ., 14 January 2009, LawLex202200006530JBJ.

CA Paris, 8 March 2001, LawLex202400003624JBJ.

Cass. com., 28 September 2004, LawLex202400003627JBJ.

See, excluding the classification of securities regarding capitalization bonds, Cass. 2e civ., 10 July 2008, LawLex202400003625JBJ.

See notably Commercial Code, Art. L. 631-10, making the shares of the company's directors in judicial reorganization non-transferable during the observation period; Labor Code, Art. L. 3332-11, making shares or investment certificates granted to employees inalienable for 5 years. Also see Monetary and Financial Code, Art. L. 211-11, which does not allow any seizure, even as a protective measure, on accounts opened with a central depository

For an illustration, See CA Paris, 8 March 2001, LawLex202400003624JBJ.

Cass. civ., 8 February 1999, LawLex202300004066JBJ: request for an advisory opinion regarding a category IV license for operating a beverage outlet, the Court of Cassation confirmed that it constitutes a seizable intangible right.

CPC exéc., Art. R. 232-2. - For a negative application, See Cass. 2e civ., 8 December 2022, LawLex202200011480JBJ, emphasizing that the seizure of SCPI shares should not be notified to the intermediary responsible for managing the securities account in which they have been registered, as this obligation only applies to registered securities, but to the issuing company.

138. Ordinary law rules