Introduction

Matrix organization

Mergers by absorption

Risks related to the expansion of the scope of criminal liability of legal entities

Validity conditions

Proof of delegation

Exemption from individual liability of delegator

Attribution of offense to legal entity

Delegations of authority

Criminal risk management within business organizations

Complicity in crimes against humanity

Breaches of secrecy

Personal data breaches

Theft

Extortion

Blackmail

Fraud

Misappropriation

Receiving/concealment of unlawfully obtained property (recel)

Attacks on automated data processing systems

Money laundering

Misappropriation by public official (concussion)

Corruption and influence peddling

Unlawful acquisition of an interest

Favoritism

Forgery and use of forgeries

Violation of Criminal Code

Offenses under the Monetary and Financial Code

Offenses under the Commercial Code

Environmental Code violations

Offenses arising from other codes

Types of offenses

Offenses under the Criminal Code, the Commercial Code, or the Environmental Code, Criminal procedure

White Collar Crime (en cours)

In its judgment of 25 November 2020 , the Criminal Chamber of the Court of Cassation questioned the impact of potential fraud on the law for mergers completed before 25 November 2020 or when the operation does not fall within the scope of the directive on mergers.
The Court of Cassation had already ruled on the concept of fraud in criminal labor law. In an old case , it required the criminal court …

Fraudulent merger by absorption

In its judgment of 25 November 2020 , the Criminal Chamber of the Court of Cassation questioned the impact of potential fraud on the law for mergers completed before 25 November 2020 or when the operation does not fall within the scope of the directive on mergers.

The Court of Cassation had already ruled on the concept of fraud in criminal labor law. In an old case , it required the criminal courts, when presented with such conclusions by a civil party, to investigate whether the substitution of one commercial company for another concealed the continuation of the same undertaking and whether this change in legal form was not intended, in fraud of the law, to thwart the free appointment of staff representatives and members of the works council.

In 2020, generalizing the principle beyond white collar crime, it establishes, for the first time, the principle that the existence of a fraudulent evasion of the law allows the judge to impose a criminal sanction on the absorbing company when the merger by absorption was intended to exempt the absorbed company from its criminal liability. If the criminal judge finds that a merger by absorption was carried out in fraudulent evasion of the law to thwart proceedings against the absorbed company, they can declare the absorbing company guilty of these acts, whether the merger was concluded before or after 25 November 2020 and whether or not it falls within the scope of the European directive. In such a case, the illicit effect sought must be considered null and void, and any penalty incurred by the absorbed company may be imposed on the absorbing company, not only the fine and confiscation.

In the 2020 decision, the Court of Cassation emphasizes that its position on this point does not constitute a reversal of case law and was not unforeseeable. Therefore, it is of immediate application, including to mergers concluded previously. The Court recently reiterated that investigating courts cannot issue a dismissal decision based on the dissolution of the absorbed company against which they find sufficient charges of having committed the acts they are seized of, without verifying, either ex officio or at the request of a party invoking it, if necessary by ordering additional information, whether the conditions for prosecuting the absorbing company could be met. The trial courts must not limit themselves to noting that the company in question underwent a merger at a time when, according to the case law of the Court of Cassation, Article 121-1 of the Criminal Code opposed the prosecution and conviction of the absorbing company for acts committed by the absorbed company prior to the merger by absorption .

Cass. crim., 25 November 2020, LawLex202200001375JBJ.

Crim., 23 April 1970, No 68-91.333, Bull. crim. No 144.

Cass. crim., 13 April 2022, LawLex202200002127JBJlf.

White Collar Crime (en cours)

11. Fraudulent merger by absorption

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

11. Fraudulent merger by absorption

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise