Right of the companies in difficulty

The Droit of the companies in difficulty has the aim of carrying out the regrouping of all the creditors of certain people in order to organize the payment of its debts. Y are subjected: individual tradesmen, business firms, noncommercial moral persons of private law (associations, civil society), farmers and craftsmen. The matter falls under the field of the Droit of the businesses and is often called right of the collective procedures . It was strongly modified by the law of the July 26th 2005 relating to the safeguard of the companies which is coming into effect on January 1st 2006. One of the contributions of the law of safeguard was to also give the liberal professions and independent access to the right of the collective procedures. Thus the judge of trade on the matter does not remain any more the only qualified judge, sharing from now on his competence with the judge of the Court of Bankruptcy if the " débiteur" is neither commercial, nor craftsman.

The main objective of the Législateur is the safeguard of employment then the refunding of the creditors. Thus, of the provisions have the aim of preventing the difficulties of the companies (conciliation procedure and procedure of safeguard) and, in the event of failure, to support their rectification. Lastly, in the event of situation irremediably compromised for the debtor, who is not able to pay all his creditors, and whose activity is not profitable any more, the compulsory liquidation of the company can be the solution under consideration by the court. All the goods of the debtor will be thus sold, the selling price will be distributed equitably between the creditors, some of them being able to profit from " sûretés" (preferential order of payment compared to the others). If the debtor is a moral person, the latter is dissolved at the conclusion of liquidation.

The actors of the right of the collective procedures are: the Receiver, the Official liquidator, the Judge of the bankruptcy court, the Public prosecutor, the Agent adhoc of paid)

Autonomy of the moral person and extension of

collective procedure

Together coherent, endorsing the form of a quasi monolithic entity surfaces some, the group of companies is characterized in substance by its plurality. It is composed indeed, moral persons distinct the one from the others, maintaining close relations. Consequently, and in spite of a coherence structural necessary to the good performance of the group, each one of these entities enjoys an autonomy principle. For this reason, the covering of the debts of a subsidiary company of the group, could not fall to the parent company, devoting the legal vacuity of the “duty of shareholder” (Court of Appeal of Paris January 13rd, 1998). The judgment which opens the safeguard, the rectification or liquidation implies only the entity which is the object, and affects only its inheritance. For as much, in exceptional circumstances, the opening of a collective procedure against a moral person, can, derogating from the principle founder of autonomy, to affect another branch of the group. In this respect, the law of July 26th, 2005 evokes two cases of extension: the confusion of the inheritances and fictivity of the moral person

On the base of the L.621-2 article of the Commercial law, it is permissible with the legal authorities to undertake the extension of the collective procedure, under a confusion of the inheritances between two or several moral persons. Thus, dice the moment or of the subjects of autonomous duty and independent, having clean inheritances, confuse the latter; the application of a collective procedure to the one of the subjects, extends to the other or the others. If this reforming extension breaks obviously with a principle of autonomy of hexagonal tradition; she unquestionably answers a quasi arithmetic logic. Jurisprudence as for it, determines the criteria of pronunciation of the extension, appreciating the insufficiency of the simple communities, interest, seat, or of means of management. So the Court of appeal, declines two situations attesting of a community of inheritance and justifying that exemption is made from the principle of autonomy of the moral person. Emergent, like criteria determining the extension of the collective procedure, on the one hand the confusion of the accounts (D.Tricot “the confusion of the inheritances and collective procedure” report/ratio of the Court of appeal 1997, p.165) and on the other hand the existence of abnormal financial flows (commercial room of the Court of appeal of January 7th, 2003).

In the same way the confusion of the inheritances constitutes a criterion of extension of the collective procedure, in the same way the fictivity of the moral person makes it possible to derogate, under a fraudulent intention of the leaders, with the principle of autonomy of the moral person. In this respect, the fictivity structural of the company must be proven, insofar as, in frontage, the group has traditional characteristics and revêt the form legally allowed. Tending, in general, has to mask the fraudulent intrigues of that or those which are papered in its shade; the bogus company plays the part of entity “plug” for purposes to withdraw credits from the pledges of the creditors. That it appears dice the creation of the company, when are lacking of the components of the contract, or that it occurs more tardily to serve as the fraudulent ends; the fictivity restricts the principle of autonomy of the moral person by allowing the extension of the procedure of safeguard

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