JUDICIAL LIQUIDATION
LexInter | June 9, 2017 | 0 Comments

CODE OF COMMERCE AND JUDICIAL LIQUIDATION

TITLE IV: Judicial liquidation.

Preliminary chapter: From the opening and unfolding of the

judicial liquidation.

Article L640-1

A judicial liquidation procedure is instituted open to any debtor mentioned in Article L.

640-2 in suspension of payments and the adjustment of which is manifestly impossible.

The judicial liquidation procedure is intended to terminate the activity of the company or to

realize the debtor’s assets through a global or separate assignment of his rights and assets.

Article L640-2

The judicial liquidation procedure is applicable to any trader, to any person

registered in the trades register, to any farmer, to any other natural person exercising

an independent professional activity including a liberal profession subject to a statute

legislative or regulatory or whose title is protected, as well as to any legal person

private.

A new judicial liquidation procedure cannot be opened with regard to a person

subject to such a procedure as long as it has not been closed.

Article L640-3

The judicial liquidation procedure is also open to the persons mentioned in the first

paragraph of Article L. 640-2 after the end of their professional activity, if all or part of their

liability comes from the latter.

When a trader, a person registered in the trade register, a farmer or

any other natural person exercising a self-employed professional activity, including a

liberal profession subject to a legislative or regulatory status or whose title is protected, is

deceased in suspension of payments, the court may be seized, within one year from the date of

date of death, on the summons of a creditor, whatever the nature of his claim, or on request

of the public prosecutor. The court may also seize it ex officio within the same time limit. He can be

seized without delay by any heir of the debtor.

Article L640-4

The opening of this procedure must be requested by the debtor at the latest within

forty-five days following the cessation of payments, if he has not within this period requested

the opening of a conciliation procedure.

If the conciliation procedure fails, if the court, ruling under the second

paragraph of Article L. 631-4, notes that the conditions mentioned in Article L. 640-1 are met,

he opens judicial liquidation proceedings.

Article L640-5

When there is no ongoing conciliation procedure, the court may also seize ex officio

or be seized at the request of the public prosecutor for the purposes of opening the liquidation procedure

judicial.

Subject to this same reservation, the procedure can also be opened on the summons of a creditor, which

whatever the nature of its claim. However, when the debtor has ceased his professional activity,

this assignment must take place within one year from:

1 ° Cancellation from the trade and companies register. If it is a legal person, the deadline

runs from the delisting following the publication of the closing of

liquidation;

2 ° The cessation of the activity, in the case of a person registered in the trades directory, of a

farmer or a natural person exercising an independent professional activity, including

including a liberal profession subject to a legislative or regulatory status or whose title is

protected;

3 ° The publication of the completion of the liquidation, in the case of a legal person not subject to

registration.

In addition, proceedings cannot be opened with regard to a debtor carrying on an agricultural activity who

is not incorporated in the form of a commercial company unless the president of the tribunal de grande

body was seized, prior to the summons, of a request tending to the designation of a

conciliator presented in application of article L. 351-2 of the rural code.

Article L640-6

The works council or, failing that, the employee representatives can communicate to the chairman

of the court or to the public prosecutor any fact revealing the cessation of payments of the debtor.

Chapter I: Judgment of judicial liquidation.

Article L641-1

  1. – Articles L. 621-1 and L. 621-2 are applicable to the judicial liquidation proceedings.
  2. – In the judgment opening the judicial liquidation, the court appoints the judge-commissioner and,

as liquidator, a registered legal representative or a person chosen on the basis of

of the first paragraph of II of Article L. 812-2. The court may, either on a proposal from the

judge-commissioner or at the request of the public prosecutor, either ex officio, replace the

liquidator or add one or more liquidators to him. The debtor or a creditor may request

the judge-commissioner to refer the matter to the court for this purpose.

When the debtor exercises a liberal profession subject to a legislative or regulatory status or

whose title is protected, the professional order or the competent authority to which, where applicable, it is

may seize the public prosecutor for the purposes mentioned in the first paragraph.

An employee representative is appointed under the conditions provided for in the second paragraph of article

  1. 621-4.It is replaced under the conditions provided for in the fifth paragraph of article L. 621-7.He

performs the mission provided for in article L. 625-2.

The controllers are appointed and exercise their powers under the same conditions as those

provided for in Title II.

III. – When the judicial liquidation is pronounced during the observation period of a

safeguard or receivership procedure, the court appoints the legal representative

as liquidator. However, the court may, by reasoned decision, at the request of

the administrator, a creditor, the debtor or the public prosecutor, to appoint as

liquidator another person under the conditions provided for in Article L. 812-2.

The court may replace the liquidator or add one or more

liquidators according to the rules provided for in II of this article.

When the debtor exercises a liberal profession subject to a legislative or regulatory status or

whose title is protected, the professional order or the competent authority to which, where applicable, it is

may seize the public prosecutor for the purposes mentioned in the first two paragraphs of this III.

  1. – The date of cessation of payments is set under the conditions provided for in Article L. 631-8.

Article L641-2

The liquidator draws up a report on the debtor’s situation within one month of his appointment, unless the

court pronounces judicial liquidation during an observation period. The provisions of

second paragraph of Article L. 621-9 are applicable.

The simplified judicial liquidation procedure provided for in Chapter IV of this Title is

applicable if it appears that the debtor’s assets do not include real estate, that the number

of its employees during the six months preceding the opening of the procedure and that its figure

tax-free business are equal to or lower than the thresholds set by decree of the Council of State.

Article L641-3

The judgment opening the judicial liquidation has the same effects as those provided for in the event of

safeguard by the first and fourth paragraphs of Article L. 622-7 and by Articles L. 622-21,

  1. 622-22, L. 622-28 and L. 622-30.

Creditors declare their claims to the liquidator in accordance with the terms set out in Articles L.

622-24 to L. 622-27 and L. 622-31 to L. 622-33.

Article L641-4

The liquidator carries out the liquidation operations at the same time as the verification of the

receivables. He can initiate or continue actions that fall within the competence of the agent.

judicial.

Unsecured claims are not verified if it appears that the proceeds of the

realization of the asset will be fully absorbed by legal costs and privileged claims, at

unless, in the case of a legal person, there is no need to charge the directors

de jure or de facto all or part of the liabilities in accordance with Articles L. 651-2 and L. 652-1.

The liquidator exercises the missions devolved to the administrator and the judicial representative by the

Articles L. 622-6, L. 622-20, L. 622-22, L. 622-23, L. 624-17, L. 625-3, L. 625-4 and L. 625-8.

For the purposes of carrying out the inventory provided for in Article L. 622-6, the court appoints a

judicial auctioneer, bailiff, notary or sworn commodity broker.

An appraisal of the debtor’s assets is carried out by the persons referred to in the fourth paragraph.

The redundancies carried out by the liquidator in application of the decision pronouncing the

liquidation are subject to the provisions of Articles L. 321-8 and L. 321-9 of the Labor Code.

Article L641-5

When the judicial liquidation is pronounced during the period of observation of a procedure

safeguard or receivership, the liquidator proceeds with liquidation operations

at the same time as it eventually completes the verification of debts and establishes the order of

creditors. He continues the actions brought before the judgment of liquidation, either by

the administrator, or by the judicial representative, and can bring actions that fall within the

jurisdiction of the judicial representative.

Article L641-6

No relatives or allies up to the fourth degree inclusive of the entrepreneur or managers

if it is a legal person cannot be appointed liquidator.

Article L641-7

The liquidator keeps the judge-commissioner, the debtor and the

prosecution of the conduct of operations.

Article L641-8

Any sum received by the liquidator in the performance of his duties is immediately paid into

deposit account at the Caisse des Dépôts et Consignations. In the event of delay, the liquidator must, in order to

the sums that he has not paid, an interest the rate of which is equal to the legal rate of interest increased by

five points.

Article L641-9

  1. – The judgment which opens or declares the judicial liquidation automatically takes precedence, from its

date, relinquishment for the debtor of the administration and disposal of his property even from

those he has acquired for any reason whatsoever as long as the judicial liquidation is not completed. The

rights and actions of the debtor concerning his assets are exercised throughout the duration of the

judicial liquidation by the liquidator.

However, the debtor can become a civil party in order to establish the culpability of the perpetrator.

of a crime or an offense of which he would be the victim.

The debtor also performs the acts and exercises the rights and actions that are not included

in the mission of the liquidator or administrator when appointed.

  1. – When the debtor is a legal person, the corporate officers in office at the time of

pronouncement of the judgment of judicial liquidation shall remain so, unless otherwise provided for in the articles of association

or decision of the general assembly. If necessary, a representative can be appointed in their

place and place by order of the president of the court at the request of any interested party, the liquidator or

of the public prosecutor.

The registered office is deemed to be at the domicile of the legal representative of the company or of the agent.

designated.

III. – When the debtor is a natural person, he cannot exercise, during the liquidation

judicial, none of the activities mentioned in the first paragraph of article L. 640-2.

Article L641-11

The judge-commissioner exercises the powers vested in him by articles L. 621-9, L.

623-2 and L. 631-11, by the first paragraph of article L. 622-13 and the fourth paragraph of article L.

622-16.

The information held by the public prosecutor is communicated to it in accordance with the rules laid down

in the second paragraph of Article L. 621-8.

The liquidator and the administrator, when appointed, receive from the judge-commissioner all

information useful for the accomplishment of their mission.

Article L641-12

Judicial liquidation does not automatically result in the termination of the lease of the buildings assigned to

business activity.

The liquidator or administrator may continue the lease or assign it under the conditions provided for in the

contract concluded with the lessor with all the rights and obligations attached to it. In case of

assignment of the lease, the provisions of article L. 622-15 are applicable.

If the liquidator or administrator decides not to continue the lease, it is terminated on his

simple request. The termination takes effect on the day of this request.

The lessor may request judicial termination or have the automatic termination of the

lease for causes prior to the judgment of judicial liquidation or, when the latter has been

pronounced after safeguard or receivership proceedings, at the opening judgment

of the procedure that preceded it. He must, if he has not already done so, submit his request within three months

the publication of the judgment of judicial liquidation.

The lessor may also request judicial termination or have the full termination noted.

lease law for failure to pay rents and charges relating to occupancy subsequent to the

judgment of judicial liquidation, under the conditions provided for in the third to fifth paragraphs of

Article L. 622-14.

The lessor’s privilege is determined in accordance with the first three paragraphs of article L.

622-16.

Article L641-13

  1. – Claims arising regularly after the judgment opening or pronouncing the liquidation

judicial process or, in the latter case, after the judgment opening the safeguard proceedings or

of receivership which preceded it, for the needs of the course of the procedure, for

the needs, if any, of the previous observation period, or because of a service

provided to the debtor, for his professional activity subsequent to one of these judgments, are

paid when due.

  1. – If they are not paid when due, they are paid by lien before all others

receivables with the exception of those guaranteed by the privilege established in Articles L. 143-10, L.

143-11, L. 742-6 and L. 751-15 of the Labor Code, those which are guaranteed by the privilege of

legal costs, those which are guaranteed by the privilege established by article L. 611-11 of this

code and those which are guaranteed by real estate securities or by movable securities

special agreements with a right of retention or constituted in application of Chapter V of Title II of

book V.

III. – Their payment is made in the following order:

1 ° Salary claims the amount of which has not been advanced in application of Articles L.

143-11-1 to L. 143-11-3 of the labor code;

2 ° Legal costs;

3 ° Loans granted as well as debts resulting from the continued performance of contracts

course in accordance with the provisions of article L. 622-13 of this code and of which the co-contractor

agrees to receive a deferred payment; these loans and payment terms are authorized by the

judge-commissioner to the extent necessary for the pursuit of the activity and are advertised.

In the event of termination of a regularly continued contract, compensation and penalties are excluded.

the benefit of this article;

4 ° The sums the amount of which has been advanced in application of 3 ° of article L. 143-11-1 of the

job ;

5 ° Other claims, according to their rank.

  1. – Unpaid debts lose the privilege conferred on them by this article if they do not have

been brought to the attention of the legal representative, the administrator when appointed or

the liquidator, within six months from the publication of the opening judgment or

pronouncing the liquidation or, failing that, within one year from that of the judgment stopping

the disposal plan.

Article L641-14

The provisions of Chapters IV and V of Title II of this book relating to the determination of the

assets of the debtor and the settlement of debts resulting from the employment contract as well as

provisions of Chapter II of Title III of this book relating to the invalidity of certain acts

apply to the judicial liquidation proceedings.

However, for the application of article L. 625-1, the liquidator summoned before the council of

labor tribunal or, failing that, the plaintiff calls before the labor tribunal the institutions

referred to in Article L. 143-11-4 of the Labor Code.

For the application of article L. 625-3 of this code, the institutions mentioned in article L.

143-11-4 of the labor code are called into question by the liquidator or, failing that, by the employees

applicants, within ten days of the judgment opening the judicial liquidation procedure or

of the judgment pronouncing it. Likewise, the pending proceedings before the industrial tribunal in the

date of the opening judgment are continued in the presence of the administrator, when it has been

designated, or the latter duly called.

Article L641-15

During the judicial liquidation proceedings, the judge-commissioner may order that the liquidator

or the administrator, when it has been appointed, or the addressee of the mail addressed to the debtor.

The debtor, previously informed, can attend the opening of the mail. However, a

summons to a court, a notification of decisions or any other letter having a

personal character must be immediately delivered or returned to the debtor.

The judge-commissioner may authorize the liquidator’s access to the e-mail received by the

debtor under conditions determined by decree of the Council of State.

When the debtor carries out an activity for which he is subject to professional secrecy, the

provisions of this article are not applicable.

Chapter II: Realization of the asset.

Section 1: Transfer of the company.

Article L642-1

The purpose of the sale of the company is to ensure the maintenance of activities susceptible to exploitation

autonomous, of all or part of the jobs attached to it and to clear the liabilities.

It can be total or partial. In the latter case, it relates to a set of elements

operations which form one or more complete and independent branches of activity.

When a set consists essentially of the right to a rural lease, the court may, under

reserves the rights to compensation of the outgoing lessee and notwithstanding the other provisions of the statute of the

lease, or authorize the lessor, his spouse or one of his descendants to take over the fund for

operate it, either assign the rural lease to another lessee proposed by the lessor or, failing that, to any

buyer whose offer was received under the conditions set out in Articles L. 642-2, L. 642-4 and L.

642-5. The provisions relating to the control of the structures of agricultural holdings are not

applicable. However, when several offers have been collected, the court takes into account the

provisions of 1 ° to 4 ° and 6 ° to 9 ° of article L. 331-3 of the rural code.

When the debtor, a natural person, exercises a liberal profession subject to legislative status

regulatory or whose title is protected, the transfer can only relate to elements

bodily. However, in the case of a public or ministerial officer, the liquidator may exercise the

right of the debtor to present his successor to the Keeper of the Seals, Minister of Justice.

Article L642-2

  1. – When the court considers that the total or partial sale of the company is possible, it

authorizes the continuation of the activity and sets the deadline within which the takeover offers must reach

to the liquidator and to the administrator when appointed.

However, if the offers received in application of Article L. 631-13 meet the conditions

provided for in II of this article and are satisfactory, the court may decide not to

application of the previous paragraph.

  1. – All offers must be in writing and include the indication:

1 ° The precise description of the goods, rights and contracts included in the offer;

2 ° Activity and funding forecasts;

3 ° The price offered, the terms of payment, the quality of the capital providers and, if

their guarantors. If the offer proposes recourse to the loan, it must specify the

conditions, in particular of duration;

4 ° From the date of completion of the transfer;

5 ° The level and employment prospects justified by the activity in question;

6 ° The guarantees taken out in order to ensure the execution of the offer;

7 ° Forecasts for the disposal of assets during the two years following the disposal;

8 ° The duration of each of the commitments made by the author of the offer.

III. – When the debtor exercises a liberal profession subject to a legislative statute or

regulatory or whose title is protected, the offer must also include an indication of the

professional qualification of the transferee.

  1. – The liquidator or administrator, when appointed, informs the debtor, the representative

of the employees and the controllers of the content of the offers received. He deposits them at the registry where all interested

can read it.

They are notified, where applicable, to the professional order or to the competent authority whose

debtor relieves.

  1. – The offer cannot be or modified, except in a sense more favorable to the objectives mentioned in

first paragraph of Article L. 642-1, nor withdrawn. It binds its author until the court decision

stopping the plan.

In the event of an appeal against the decision stopping the plan, only the transferee remains bound by his offer.

Article L642-3

Neither the debtor, nor the de jure or de facto managers of the legal person in compulsory liquidation, nor

the relatives or allies up to the second degree inclusive of these officers or the debtor

natural person, nor the persons having or having had the capacity of controller during the

procedure are not allowed, directly or through an intermediary, to submit an offer. Likewise, it

These persons are prohibited from acquiring, within five years following the transfer, all or part of

property dependent on the liquidation, directly or indirectly, as well as to acquire shares

or equity securities of any company having in its assets, directly or indirectly, all or

part of these assets, as well as securities giving access, within the same period, to the capital

of this company.

However, in the case of an agricultural operation, the court may waive these prohibitions and

authorize the transfer to one of the persons referred to in the first paragraph, with the exception of the controllers.

In other cases, the court, at the request of the public prosecutor, may authorize the assignment to one of the

persons referred to in the first paragraph, with the exception of the controllers, by a special judgment

reasoned, after having requested the opinion of the controllers.

Any act carried out in violation of this article is canceled at the request of any interested party or of the

prosecution, presented within three years from the conclusion of the act. When

the act is subject to publicity, the time limit runs from this.

Article L642-4

The liquidator or administrator, when appointed, gives the court all the information

making it possible to verify the seriousness of the offer as well as the third party quality of its author at

meaning of the provisions of article L. 642-3.

It also provides the court with all the information enabling it to assess the conditions for the discharge of the

liabilities, in particular with regard to the offered price, residual assets to be recovered or realized, debts

the period of continued activity and, where applicable, other debts remaining payable by the

debtor.

Article L642-5

After having obtained the opinion of the public prosecutor and having heard or duly called the debtor, the

liquidator, the administrator when appointed, the representatives of the works council or, at

default, staff representatives and controllers, the court accepts the offer which allows in the

best conditions to ensure the most lasting employment attached to the sold unit, the payment

creditors and who offers the best performance guarantees. He decides on one or more plans of

assignment.

The debates must take place in the presence of the public prosecutor when the proceedings are opened at the

benefit of natural or legal persons whose number of employees or turnover excluding

taxes is greater than a threshold set by decree of the Council of State.

The judgment which fixes the plan makes its provisions applicable to all.

When the plan provides for redundancies for economic reasons, it cannot be stopped by the

court only after the works council or, failing that, the staff representatives have been consulted

under the conditions provided for in Article L. 321-9 of the Labor Code and the administrative authority

competent person informed under the conditions provided for in Article L. 321-8 of the same code. The precise plan

in particular dismissals which must occur within one month after the judgment. In

this period, these redundancies occur upon simple notification of the liquidator, or

the administrator when appointed, subject to the rights of notice provided for by law, the

collective labor agreements or agreements.

Article L642-6

A substantial change in the objectives and means of the plan can only be decided by

the court, at the request of the assignee.

The court rules after having heard or duly called the liquidator, the receiver

when appointed, the controllers, representatives of the works council or, failing that,

staff representatives and any interested person and after having obtained the opinion of the public prosecutor.

However, the amount of the sale price as fixed in the judgment stopping the plan cannot

be changed.

Article L642-7

The court determines contracts for the leasing, rental or supply of goods or services

necessary to maintain the activity in view of the observations of the debtor’s co-contracting parties

sent to the liquidator or administrator when appointed.

The judgment adopting the plan entails the assignment of these contracts, even when the assignment is

preceded by the lease-management provided for in article L. 642-13.

These contracts must be performed under the conditions in force on the day the procedure is opened,

notwithstanding any clause to the contrary.

In the event of the transfer of a financial lease contract, the lessee can only exercise the purchase option

case of payment of the sums remaining due within the limit of the value of the property fixed jointly

agreement between the parties or, failing that, by the court on the date of the assignment.

Article L642-8

In execution of the plan adopted by the court, the liquidator or the administrator when it has been

designated passes all the acts necessary for the completion of the transfer. Waiting for

the performance of these acts and upon justification of the deposit of the sale price or of a

equivalent guarantee, the court may entrust to the assignee, at his request and under his responsibility,

the management of the transferred company.

When the sale includes a business, no higher bid is allowed.

Article L642-9

As long as the transfer price has not been paid in full, the transferee cannot, with the exception of

stocks, alienate or lease-manage the tangible or intangible assets that it has acquired.

However, their total or partial alienation, their use as security, their rental or their

lease-management may be authorized by the court after a report from the liquidator who must

consult the works council or, failing that, the employee representatives. The tribunal

must take into account the guarantees offered by the transferee.

Any substitution of assignee must be authorized by the court in the judgment stopping the

disposal plan, without prejudice to the implementation of the provisions of Article L. 642-6. The author

of the offer selected by the court remains jointly and severally liable for the performance of the commitments it has made.

subscribed.

Any act passed in violation of the preceding paragraphs is canceled at the request of any interested party or

of the public prosecutor, presented within three years from the conclusion of the act.

When the act is subject to publicity, the period starts from this.

Article L642-10

The court may attach a clause to the assignment plan making it inalienable, for a period that it

fixed, all or part of the goods sold.

The publicity of this clause is ensured under conditions fixed by a decree in Council of State.

Any act passed in violation of the provisions of the first paragraph is canceled at the request of any

interested party or the public prosecutor, presented within three years from the conclusion of

the act. When the act is subject to publicity, the period starts from this.

Article L642-11

The transferee reports to the liquidator on the application of the provisions provided for in the

assignment.

If the assignee does not perform his obligations, the court may, at the request of the public prosecutor

on the one hand, the liquidator, a creditor, any interested party or ex officio, after having obtained the opinion of the

public prosecutor, on the other hand, pronounce the resolution of the plan without prejudice to damage and

interests.

The court may pronounce the resolution or termination of acts passed in execution of the plan

resolved. The price paid by the assignee remains acquired.

Article L642-12

When the assignment relates to assets encumbered by a special lien, pledge or

mortgage, a share of the price is allocated by the court to each of these goods for the

distribution of the price and the exercise of the preferential right.

The payment of the sale price is an obstacle to the exercise against the assignee of the rights of the

creditors registered on these assets.

Until full payment of the price which includes the purging of registrations encumbering the goods included

in the assignment, creditors benefiting from a resale right can only exercise it in the event of

alienation of the property transferred by the transferee.

However, the burden of special real estate and movable securities guaranteeing reimbursement

a loan granted to the company to enable it to finance an asset to which these relate

collateral is transferred to the assignee. The latter is then required to pay into the hands of the creditor.

the deadlines agreed with him and which remain due from the transfer of the property or, in case

of lease-management, of the enjoyment of the property to which the guarantee relates. It can be waived

provisions of this paragraph by agreement between the assignee and the creditors holding the securities.

Article L642-13

By the judgment which fixes the plan of transfer, the court can authorize the conclusion of a contract of

lease management, even in the presence of any contrary clause, in particular in the lease of

the building, for the benefit of the person who presented the acquisition offer allowing in the

better conditions to ensure the most lasting employment and payment of creditors.

The court rules after having heard or duly called the liquidator, the receiver

when appointed, the controllers, representatives of the works council or, failing that,

staff representatives and any interested person and after having obtained the opinion of the public prosecutor.

Article L642-14

The provisions of Articles L. 144-3, L. 144-4 and L. 144-7 on lease management are not

applicable.

Article L642-15

In the event of a management lease, the company must be effectively sold within two years of the judgment.

who stops the plan.

Article L642-16

The liquidator can be communicated by the tenant-manager all the documents and information

useful to its mission. He reports to the court of any infringement of the elements taken into account.

lease-management as well as the non-performance of the obligations incumbent on the tenant-manager.

The court, ex officio or at the request of the liquidator or the public prosecutor, may order the

termination of the lease-management contract and termination of the plan.

Article L642-17

If the tenant-manager does not fulfill his obligation to acquire under the conditions and deadlines set by

the plan, the court, ex officio or at the request of the liquidator or the public prosecutor, orders the

termination of the lease-management contract and termination of the plan without prejudice to any damage

and interest.

However, when the tenant-manager justifies that he cannot acquire under the conditions initially

planned for a cause that is not attributable to him, he may ask the court to modify these

conditions, except with regard to the amount of the price and the deadline provided for in Article L. 642-15. The

court rules before the expiry of the rental contract and after obtaining the opinion of the ministry

public and heard or duly called the liquidator, the administrator when appointed, the

controllers, representatives of the works council or, failing that, employee representatives and any

interested person.

Section 2: Transfer of the debtor’s assets.

Article L642-18

The sales of buildings take place in accordance with the prescribed forms in terms of foreclosure.

However, the judge-commissioner sets, after having collected the observations of the controllers, the

debtor and liquidator heard or duly summoned, the initial price and the essential conditions of

the sale and determines the terms of advertising.

When a foreclosure procedure initiated before the opening of the foreclosure procedure

safeguard, reorganization or judicial liquidation has been suspended by the effect of this

last, the liquidator can be subrogated in the rights of the seizing creditor for the acts that

the latter carried out, which are deemed to be carried out on behalf of the liquidator who proceeds to the

sale of buildings. The foreclosure can then resume its course at the stage where the judgment

opening had suspended it.

Under the same conditions, the judge-commissioner may, if the consistency of the goods, their location

or the offers received are such as to allow an amicable transfer under better conditions,

order the sale by amicable auction on the starting price that he fixes or authorize the sale by mutual agreement

at the prices and conditions it determines. In case of amicable adjudication, it can always be done

bidding up.

The auctions carried out in application of the preceding paragraphs shall entail the purging of

mortgages.

The liquidator distributes the proceeds of the sales and settles the order among the creditors, subject to the

disputes which are brought before the execution judge.

In the event of judicial liquidation of a farmer, the court may, in consideration of the situation

debtor, grant him grace periods, the duration of which he determines for

leave his main dwelling house.

The terms of application of this article are set by decree of the Council of State.

Article L642-19

After having collected the observations of the controllers, the judge-commissioner orders the sale to the

public auction or authorizes the sale by mutual agreement of the debtor’s other assets, the latter being

heard or duly called. When the sale takes place by public auction, it is carried out within

conditions provided for, as the case may be, in the second paragraph of Article L. 322-2 or in Articles L. 322-4 or L.

322-7.

The judge-commissioner may request that the draft amicable sale be submitted to him in order to verify whether

the conditions he set have been met.

Article L642-20

The provisions of Article L. 642-3 are applicable to asset disposals carried out in application of

Articles L. 642-18 and L. 642-19. In this case, the powers of the court are exercised by the

judge commissioner.

Article L642-21

When the provisions of Article L. 631-22 have been applied and the debtor cannot

obtain from the court the order of a recovery plan, the provisions of this title are

applicable. The assets not included in the disposal plan are sold under the conditions of the

this section.

Section 3: Common provisions.

Article L642-22

Any transfer of a business and any realization of assets must be preceded by an advertisement, the

terms and conditions are determined by a decree in the Council of State depending on the size of the company and

the nature of the assets to be sold.

Article L642-23

Before any sale or destruction of the debtor’s archives, the liquidator informs the authority

administrative authority responsible for the preservation of archives. This authority has a right to

pre-emption.

The destination of the debtor’s archives subject to professional secrecy is determined by the

liquidator in agreement with the professional order or the competent authority to which he reports.

Article L642-24

The liquidator may, with the authorization of the bankruptcy judge and the debtor, after hearing or duly

called, compromise and compromise on all disputes that collectively interest the

creditors even on those relating to real estate rights and actions.

If the object of the compromise or transaction is of undetermined value or exceeds jurisdiction

in the last resort of the court, the compromise or the transaction is subject to the approval of the

court.

Article L642-25

The liquidator authorized by the judge-commissioner may, by paying the debt, withdraw the assets constituted

pledged by the debtor or the thing retained.

In the absence of withdrawal, the liquidator must, within six months of the judgment of judicial liquidation,

ask the commissioner for authorization to proceed with the realization. The liquidator notifies

authorization to the creditor fifteen days before the realization.

The pledgee, even if he has not yet been admitted, can ask the bankruptcy judge, before the

realization, judicial attribution. If the claim is rejected in whole or in part, he shall return to the

liquidator the property or its value, subject to the admitted amount of its claim.

In the event of sale by the liquidator, the right of retention is automatically transferred to the price.

Any entry made for the preservation of the pledge is canceled at the behest of the

liquidator.

Chapter III: Clearance of liabilities.

Section 1: Settlement of creditors.

Article L643-1

The judgment opening or pronouncing judicial liquidation renders unmatured debts payable.

However, when the court authorizes the continuation of the activity on the grounds that the total transfer or

part of the business is possible, unmatured receivables are due on the date of

judgment pronouncing the assignment.

When these claims are expressed in a currency other than that of the place where the

liquidation, they are converted into the currency of this place, according to the exchange rate at the

date of judgment.

Article L643-2

Creditors holding a special lien, pledge or mortgage and the Treasury

public for its privileged claims may, once they have declared their claims even if they

are not yet admitted, exercise their right of individual prosecution if the liquidator has not

initiated the liquidation of the encumbered assets within three months from the judgment opening

or pronounces judicial liquidation.

When the court has set a time limit in application of Article L. 642-2, these creditors may

exercise their right of individual prosecution at the end of this period, if no offer including this property

has not been presented.

In the event of the sale of buildings, the provisions of the first, third and fifth paragraphs of

Article L. 642-18 are applicable. When a foreclosure procedure has been initiated before

the opening judgment, the creditor holding a mortgage is exempt, when the resumption of the

individual prosecutions, acts and formalities carried out before this judgment.

Article L643-3

The judge-commissioner may, ex officio or at the request of the liquidator or a creditor, order the

provisional payment of a share of a definitively admitted debt.

This provisional payment may be subject to the presentation by its beneficiary of a guarantee

from a credit institution.

In the event that the request for a provision relates to a privileged debt of the administrations

financial institutions, social security bodies, institutions managing the insurance scheme

unemployment provided for by Articles L. 351-3 et seq. of the Labor Code and institutions governed by

Book IX of the Social Security Code, the guarantee provided for in the second paragraph is not due.

Article L643-4

If one or more distributions of sums precede the distribution of the price of the buildings, the

privileged creditors and admitted mortgagees contribute to the distributions in proportion to their

total claims.

After the sale of the buildings and the final settlement of the order between the mortgage creditors

and privileged, those among them who come in useful rank on the price of the buildings for the totality

of their debt receive the amount of their mortgage collocation only after the deduction of

are received by them.

The amounts thus deducted benefit unsecured creditors.

Article L643-5

The rights of mortgage creditors who are partially collocated on the distribution of the price

buildings are settled according to the amount that remains due to them after the real estate collocation.

The excess of dividends they received in previous distributions over the

dividend calculated after collocation is withheld from the amount of their mortgage collocation and is

included in the sums to be distributed to unsecured creditors.

Article L643-6

The privileged or mortgage creditors, not satisfied on the price of the buildings, compete with

unsecured creditors for what is still due to them.

Article L643-7

Subject to the third paragraph of article L. 642-25, the provisions of articles L. 643-4 to L.

643-6 apply to creditors who are beneficiaries of a special movable security.

Article L643-8

The amount of the assets, excluding the costs and expenses of judicial liquidation, subsidies

granted to the head of the company or managers or their families and sums paid to

privileged creditors, is distributed among all creditors to the marc the franc of their claims

admitted.

The portion corresponding to debts on the admission of which it would not have been ruled

definitively and, in particular, the remuneration of the corporate officers as long as it has not been

ruled on their case, is put in reserve.

Section 2: Closing of judicial liquidation operations.

Article L643-9

In the judgment opening or pronouncing judicial liquidation, the court sets the time limit at the end of

from which the closure of the proceedings will have to be considered. If the closure cannot be pronounced at the end of

of this period, the court may extend the term by a reasoned decision.

When there are no more liabilities due or the liquidator has sufficient sums to

pay off creditors, or when the continuation of judicial liquidation operations is

made impossible due to insufficient assets, the closure of the judicial liquidation is

pronounced by the court, the debtor heard or duly called.

The court is seized at any time by the liquidator, the debtor or the public prosecutor. It can be

seize automatically. At the expiration of a period of two years from the judgment of judicial liquidation,

any creditor may also apply to the court for the purpose of closing the proceedings.

In the event of a disposal plan, the court only declares the closure of the proceedings after having noted

compliance with its obligations by the transferee.

Article L643-10

The liquidator carries out the rendering of the accounts. He is responsible for the documents that have been sent to him

handed over during the procedure for five years from this surrender.

Article L643-11

  1. – The judgment closing judicial liquidation for insufficient assets does not allow recovery

to creditors the individual exercise of their actions against the debtor, unless the claim results from:

1 ° A criminal conviction of the debtor;

2 ° Of rights attached to the person of the creditor.

  1. – However, the surety or the co-obligated party who paid instead of the debtor may sue

this one.

III. – Creditors recover their right of individual action in the following cases:

1 ° The personal bankruptcy of the debtor has been declared;

2 ° The debtor has been found guilty of bankruptcy;

3 ° The debtor or a legal person of which he has been the manager has been subject to a

previous judicial liquidation closed for insufficient assets less than five years before

the opening of that to which it is subjected;

4 ° The proceedings were opened as territorial proceedings within the meaning of paragraph 2 of Article

3 of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings.

  1. – In addition, in the event of fraud against one or more creditors, the court authorizes the

resumption of individual actions of any creditor against the debtor. The court rules during

the closure of the procedure after having heard or duly called the debtor, the liquidator and the

controllers. It can rule after this, at the request of any interested party, within

same conditions.

  1. – Creditors who recover the individual exercise of their actions in application of this

article may, if their claims have been admitted, obtain an enforceable title by order of the

president of the tribunal or, if their claims have not been verified, implement it within the

common law conditions.

Article L643-12

The closure of the judicial liquidation suspends the effects of the measure prohibiting the issuance of

checks, of which the debtor is the subject under article 65-3 of the decree of October 30, 1935 unifying the

law relating to checks and payment cards, implemented on the occasion of rejection

a check issued before the judgment opening the procedure.

If the creditors recover their right of individual action, the prohibition measure resumes

effective from the issuance of the writ of execution referred to in the last paragraph of Article L. 643-11.

Article L643-13

If the judicial liquidation is closed for insufficient assets and it appears that

assets have not been realized or actions in the interest of creditors have not been

initiated during the course of the procedure, it can be resumed.

The court is seized by the liquidator previously appointed, by the public prosecutor or by any

interested creditor. It can also be seized ex officio. If seized by a creditor, the latter must

justify having consigned to the court office the funds necessary to cover the costs of the operations. The

amount of the recorded costs is reimbursed to him in priority over the sums recovered following the

resumption of proceedings.

If the debtor’s assets consist of a sum of money, the procedure provided for in Chapter IV of the

this title is of applicable law.

Chapter IV: Simplified judicial liquidation.

Article L644-1

The simplified judicial liquidation procedure is subject to the rules of judicial liquidation,

subject to the provisions of this chapter.

Article L644-2

By way of derogation from the provisions of Article L. 642-19, when the court decides on the application of

this chapter, it determines the assets of the debtor that may be the subject of a sale by mutual agreement. The

liquidator does so within three months of the publication of this judgment.

At the end of this period, the remaining goods are sold by public auction.

Article L644-3

By way of derogation from the provisions of Article L. 641-4, only the

receivables likely to rank useful in the distributions and receivables resulting from a

employment contract.

Article L644-4

At the end of the procedure of verification and admission of these debts and of the realization of the goods,

the liquidator draws up a distribution plan that he files at the clerk’s office where any interested party can take it

knowledge and which is the subject of a publicity measure.

Any interested party can contest the distribution plan before the bankruptcy judge within a fixed period.

by decree of the Council of State.

The judge-commissioner rules on disputes by means of a decision which is the subject of a

publicity and notification to interested creditors. An appeal can be lodged within a

set by decree in the Council of State.

The liquidator proceeds with the distribution in accordance with the plan or the decision rendered.

Article L644-5

At the latest one year after the opening of the proceedings, the court declares the liquidation closed

judicial, the debtor heard or duly called.

He may, by a specially reasoned judgment, extend the procedure for a period which cannot

exceed three months.

Article L644-6

At any time, the court may decide, by a specially reasoned judgment, not to

application of the exemptions provided for in this chapter.

TITLE V: Responsibilities and sanctions.

Article L650-1

Creditors cannot be held responsible for damages suffered as a result of the contests.

granted, except in cases of fraud, serious interference in the management of the debtor or if the

guarantees taken in return for these contributions are disproportionate to them.

In the event that the liability of a creditor is recognized, the guarantees taken in return for

its contests are void.

Chapter I: Liability for insufficient assets.

Article L651-1

The provisions of this chapter and of chapter II of this title are applicable to the directors

of a private law legal person subject to bankruptcy proceedings, as well as to persons

physical permanent representatives of these corporate executives.

Article L651-2

When the resolution of a safeguard or receivership plan or the liquidation

court of a legal person reveals a lack of assets, the court may, in the event of

for lack of management that contributed to this lack of assets, decide that the debts of the person

moral will be supported, in whole or in part, by all de jure or de facto managers or by certain

of them, having contributed to the mismanagement. In the event of multiple directors, the court may,

by reasoned decision, declare them jointly and severally liable.

The action is prescribed by three years from the judgment pronouncing the judicial liquidation or the

plan resolution.

The sums paid by the directors in application of paragraph 1 enter into the assets of the

debtor. These sums are distributed among all the creditors of the marc le franc.

Article L651-3

In the case provided for in article L. 651-2, the court is referred to the court by the legal representative, the liquidator

or the public prosecutor.

In the collective interest of creditors, the court may also be seized by the majority of

creditors appointed as controllers when the legal representative with standing does not have

initiated the actions provided for in the same article, after a formal notice remained unanswered in a

deadline and conditions set by decree of the Council of State.

In the case referred to in the first paragraph, the judge-commissioner may not sit in the formation of

judgment, nor participate in deliberation.

The legal costs to which the manager was convicted are paid in priority over the sums which

are paid to cover the liabilities.

Article L651-4

For the application of the provisions of Article L. 651-2, ex officio or at the request of one of the

persons mentioned in Article L. 651-3, the president of the court may instruct the

judge-commissioner or, failing that, a member of the court he designates to obtain, notwithstanding any

contrary legislative provision, communication of any document or information on the situation

patrimonial of directors and permanent representatives of directors of legal entities

mentioned in Article L. 651-1 on the part of administrations and public bodies,

provident and social security organizations and credit institutions.

The president of the tribunal may, under the same conditions, order any useful precautionary measure

with regard to the property of the managers or their representatives referred to in the preceding paragraph.

The provisions of this article are also applicable to members or associates.

of the legal person in safeguard, reorganization or judicial liquidation proceedings,

when they are jointly and severally liable for its debts.

Chapter II: From obligation to social debts.

Article L652-1

During judicial liquidation proceedings, the court may decide to charge

one of the de jure or de facto directors of a legal person all or part of the debts of

the latter when it is established, against this manager, that one of the following faults has

contributed to the suspension of payments:

1 ° To have disposed of the property of the legal person as well as his own;

2 ° Under cover of the legal person masking its actions, having carried out acts of

trading in personal interest;

3 ° Have made use of the property or credit of the legal person contrary to the interest of the latter

for personal purposes or to favor another legal person or company in which he was

interested directly or indirectly;

4 ° To have pursued abusively, in a personal interest, a loss-making operation which does not

could lead only to the cessation of payments of the legal person;

5 ° Having embezzled or concealed all or part of the assets or fraudulently increased the liabilities of the

Corporation.

In the cases referred to in this article, the provisions of article L.

651-2.

Article L652-2

In the event of multiple responsible officers, the court takes into account the fault of each for

determine the share of social debts charged to it. By reasoned decision, he can declare them

jointly and severally liable.

Article L652-3

The sums recovered are allocated to the compensation of creditors according to the order of their

sureties.

Article L652-4

The action is prescribed by three years from the judgment pronouncing the judicial liquidation.

Article L652-5

The provisions of Articles L. 651-3 and L. 651-4 are applicable to the action provided for in this

chapter.

Chapter III: Personal bankruptcy and other measures

prohibition.

Article L653-1

  1. – When a judicial reorganization or judicial liquidation procedure is opened, the

provisions of this chapter are applicable:

1 ° To natural persons exercising the profession of trader, farmer or registered

to the directory of trades and to any other natural person exercising a professional activity

independent including a liberal profession subject to a legislative or regulatory status or

whose title is protected;

2 ° To natural persons, de jure or de facto directors of legal persons;

3 ° To natural persons, permanent representatives of legal persons, managers of

legal persons defined in 2 °.

These same provisions are not applicable to natural persons or managers of persons

legal, exercising an independent professional activity and, as such, subject to rules

disciplinary.

  1. – The actions provided for in this chapter are prescribed by three years from the judgment

which declares the opening of the procedure mentioned in I.

Article L653-2

Personal bankruptcy entails prohibition to direct, manage, administer or control, directly

or indirectly, any commercial or craft enterprise, any agricultural operation or any

company with any other independent activity and any legal person.

Article L653-3

The court may declare the personal bankruptcy of any person mentioned in 1 ° of I of

Article L. 653-1, subject to the exceptions provided for in the last paragraph of I of the same article, against

which one of the following facts was noted:

1 ° To have pursued abusively a loss-making operation which could only lead to the

cessation of payments;

2 ° Repealed.

3 ° Having embezzled or concealed all or part of its assets or fraudulently increased its liabilities.

Article L653-4

The court can declare the personal bankruptcy of any manager, de jure or de facto, of a

legal person, who has committed one of the faults mentioned in article L. 652-1.

Article L653-5

The court can pronounce the personal bankruptcy of any person mentioned in article L. 653-1

against which one of the following facts has been identified:

1 ° Have exercised a commercial, craft or agricultural activity or a managerial position or

administration of a legal person contrary to a prohibition provided by law;

2 ° Have, with the intention of avoiding or delaying the opening of the reorganization proceedings

judicial or liquidation, purchases for resale below the price or

employed ruinous means to obtain funds;

3 ° Have subscribed, on behalf of others, without consideration, commitments deemed too important

at the time of their conclusion, having regard to the situation of the business or legal person;

4 ° To have paid or caused to be paid, after cessation of payments and with full knowledge thereof,

a creditor to the detriment of other creditors;

5 ° Having, by voluntarily abstaining from cooperating with the procedural bodies, obstructs

its smooth running;

6 ° To have removed accounting documents, not to have kept accounts when the

applicable texts require it, or have kept fictitious accounts, obviously

incomplete or irregular with regard to the applicable provisions.

Article L653-6

The court can pronounce the personal bankruptcy of the manager of the legal person who has not

discharged its debts charged to it.

Article L653-7

In the cases provided for in Articles L. 653-3 to L. 653-6 and L. 653-8, the court is seized by the

judicial representative, the liquidator or the public prosecutor.

In the collective interest of the creditors, the court may also be seized at any time of the

procedure by the majority of creditors appointed supervisors when the legal representative having

standing has not initiated the actions provided for in the same articles, after a formal notice

remained without follow-up within a period and under the conditions set by decree in the Council of State.

In the same cases as those provided for in the first paragraph, the judge-commissioner may not sit in

the formation of judgment, nor participate in the deliberation.

Article L653-8

In the cases provided for in Articles L. 653-3 to L. 653-6, the court may pronounce, in place of the

personal bankruptcy, the prohibition to direct, manage, administer or control, directly or

indirectly, or any commercial or craft enterprise, any agricultural operation and any

legal person, or one or more of these.

The prohibition mentioned in the first paragraph may also be pronounced against any

person mentioned in Article L. 653-1 who, in bad faith, has not delivered to the agent

court, administrator or liquidator the information he is required to communicate to him

in application of article L. 622-6 in the month following the opening judgment.

It can also be pronounced against any person mentioned in article L. 653-1.

who has failed to make, within forty-five days, the declaration of cessation of

payments, without having, moreover, requested the opening of a conciliation procedure.

Article L653-9

The right to vote of executives suffering from personal bankruptcy or the prohibition provided for in Article

  1. 653-8 is exercised in meetings of legal persons subject to a procedure of

safeguard, receivership or liquidation by an agent appointed by the

court for this purpose, at the request of the administrator, liquidator or commissioner of enforcement

plan.

The court may order these managers or some of them to sell their shares or shares

companies in the legal person or order their forced transfer through the care of an agent of

justice, if necessary after expertise. The proceeds of the sale are allocated to the payment of the part of the debts

social security if these debts have been charged to the directors.

Article L653-10

The court which declares the personal bankruptcy can pronounce the incapacity to exercise a function

elective public. The incapacity is pronounced for a period equal to that of the personal bankruptcy,

within the limit of five years. When the decision has become final, the public prosecutor shall notify

the person concerned the incapacity, which takes effect from the date of this notification.

Article L653-11

When the court declares personal bankruptcy or the prohibition provided for in article L. 653-8, it

sets the duration of the measure, which may not exceed fifteen years. He can order the execution

provisional decision. Forfeitures, prohibitions and inability to perform a function

public elective cease automatically at the fixed term, without there being any need for the pronouncement of a

judgment.

The closing judgment for the extinction of the liabilities, including after performance of the obligation

social debts pronounced against him, reinstates the business manager or the directors of the

legal person in all their rights. He dispenses them or relieves them of all forfeitures,

prohibitions and inability to hold elected public office.

The interested party can ask the court to relieve it, in whole or in part, of the disqualifications and prohibitions.

and the inability to exercise an elective public office if he has made a sufficient contribution

payment of liabilities.

When it has been subject to the prohibition provided for in Article L. 653-8, it may be relieved if it presents

all guarantees demonstrating his ability to manage or control one or more of the companies or

persons covered by the same article.

When there is a total increase in disqualifications and prohibitions and in incapacity, the decision of the

court wins rehabilitation.

Chapter IV: Bankruptcy and other offenses.

Section 1: Bankruptcy.

Article L654-1

The provisions of this section are applicable:

1 ° To any trader, farmer, to any person registered in the trades directory and to

any natural person exercising a self-employed professional activity, including a

liberal profession subject to legislative or regulatory status or whose title is protected;

2 ° To any person who has, directly or indirectly, in law or in fact, directed or liquidated a

legal person governed by private law;

3 ° To natural persons who are permanent representatives of legal persons managing

legal persons defined in 2 ° above.

Article L654-2

In the event of the opening of judicial reorganization or liquidation proceedings, are

guilty of bankruptcy the persons mentioned in article L. 654-1 against whom

noted one of the following facts:

1 ° Have, with the intention of avoiding or delaying the opening of the reorganization proceedings

judicial process, either made purchases with a view to resale below the price, or employed

ruinous to raise funds;

2 ° Having embezzled or concealed all or part of the debtor’s assets;

3 ° Having fraudulently increased the debtor’s liabilities;

4 ° Have kept fictitious accounts or have removed the company’s accounting documents

or of the legal person or having refrained from keeping any accounts when the applicable texts

make it compulsory;

5 ° Have kept accounts that are clearly incomplete or irregular with regard to the provisions

legal.

Article L654-3

Bankruptcy is punished by five years’ imprisonment and a fine of 75,000 euros.

The accomplices of bankruptcy incur the same penalties, even if they do not have the quality of

trader, farmer or craftsman or do not direct, directly or indirectly, in law or

in fact, a legal person governed by private law.

Article L654-4

When the author or accomplice in bankruptcy is an executive of a company providing

investment services, the penalties are increased to seven years’ imprisonment and 100,000 euros

fine.

Article L654-5

Natural persons guilty of the offenses provided for in Articles L. 654-3 and L.

654-4 also incur the following additional penalties:

1 ° The prohibition of civic, civil and family rights, according to the terms of article

131-26 of the penal code;

2 ° Prohibition, in accordance with the terms set out in article 131-27 of the penal code, either

to exercise a public function or to exercise professional or social activity in

the exercise or on the occasion of the exercise of which the offense was committed, either to exercise

a commercial or industrial profession, to direct, administer, manage or

control in any capacity, directly or indirectly, for its own account or

for the account of others, a commercial or industrial enterprise or a company

commercial. These exercise prohibitions may be pronounced cumulatively;

3 ° Exclusion from public contracts for a period of five years at most;

4 ° Prohibition, for a maximum period of five years, from issuing checks other than

those which allow the withdrawal of funds by the drawer from the drawee or those which are certified

5 ° The display or dissemination of the decision pronounced under the conditions provided for by

article 131-35 of the penal code.

Article L654-6

The criminal court which recognizes one of the persons mentioned in article L. 654-1 guilty

bankruptcy can, moreover, pronounce either the personal bankruptcy of this one, or the prohibition

provided for in Article L. 653-8, unless a civil or commercial court has already pronounced a

such measure by a final decision.

Article L654-7

  1. – Legal persons can be declared criminally liable, under the conditions

provided for by article 121-2 of the penal code, of the offenses provided for by articles L. 654-3 and L.

654-4.

  1. – The penalties incurred by legal persons are:

1 ° The fine, in accordance with the terms provided for in article 131-38 of the penal code;

2 ° The penalties mentioned in article 131-39 of the penal code.

III. – The prohibition mentioned in 2 ° of article 131-39 of the penal code relates to the activity in

the exercise or on the occasion of the exercise of which the offense was committed.

Section 2: Other offenses.

Article L654-8

Is liable to imprisonment for two years and a fine of 30,000 euros if:

1 ° For any person mentioned in article L. 654-1, to consent during the period

observation of a mortgage or collateral or to make an act of disposal without

the authorization provided for in the second paragraph of Article L. 622-7 or to pay, in whole or in part, a

debt in violation of the prohibition mentioned in the first paragraph of this article;

2 ° For any person mentioned in article L. 654-1, to make a payment in violation of the

terms of settlement of liabilities provided for in the safeguard plan or the recovery plan,

make an act of disposal without the authorization provided for in Article L. 626-14 or proceed to the

transfer of property made inalienable, within the framework of a disposal plan, in application of article L.

642-10;

3 ° For any person, during the observation period or that of the execution of the safeguard plan

or the reorganization plan, with knowledge of the debtor’s situation, to enter into one of the

of the acts mentioned in 1 ° and 2 ° or to receive an irregular payment.

Article L654-9

The following is punishable by the penalties provided for in Articles L. 654-3 to L. 654-5:

1 ° In the interest of the persons mentioned in Article L. 654-1, to remove, conceal or conceal

all or part of the property, movable or immovable thereof, all without prejudice to the application

of article 121-7 of the penal code;

2 ° For any person, to fraudulently declare in the safeguard procedure, to

receivership or liquidation, either in its name or by interposition of

person, supposed claims;

3 ° For any person carrying out a commercial, craft, agricultural or any other activity

independent, under the name of another or under a supposed name, to be guilty of one of the facts

provided for in Article L. 654-14.

Article L654-10

The fact, for the spouse, descendants or ascendants or collaterals or allies of

persons mentioned in Article L. 654-1, to divert, entertain or conceal effects depending on

the debtor’s assets subject to a safeguard or reorganization procedure, are punishable by

penalties provided for in article 314-1 of the penal code.

Article L654-11

In the cases provided for in the preceding articles, the court seised shall rule, even when there is

relax:

1 ° Ex officio, on the reintegration into the debtor’s patrimony of all property, rights or actions

which have been fraudulently removed;

2 ° On the damages that would be requested.

Article L654-12

  1. – Is punished by the penalties provided for by article 314-2 of the penal code the fact, for any administrator,

legal agent, liquidator or commissioner for the execution of the plan:

1 ° To deliberately harm the interests of creditors or the debtor, either by using

profit from the sums collected in the accomplishment of its mission, or by being allocated

advantages which he knew were not due;

2 ° To make, in his own interest, of the powers at his disposal, a use which he knew to be contrary to the

interests of creditors or debtor.

  1. – Is punished by the same penalties the fact, for any administrator, legal representative, liquidator,

commissioner for the execution of the plan or any other person, with the exception of representatives of

employees, to acquire on their own behalf, directly or indirectly, property of the

debtor or use them for his benefit, having participated in any capacity in the proceedings. The

court seized declares the acquisition null and void and rules on the damages which

would be requested.

Article L654-13

The fact, for the creditor, after the judgment opening the safeguard procedure, of reorganization

judicial or liquidation, to enter into an agreement with a particular advantage

payable by the debtor is punished by the penalties provided for by article 314-1 of the penal code.

The court seised declares the nullity of this agreement.

Article L654-14

The penalties provided for in Articles L. 654-3 to L. 654-5 are punishable by the fact, for the persons mentioned

in 2 ° and 3 ° of Article L. 654-1, in bad faith, with a view to withdrawing all or part of their

patrimony to the proceedings of the legal person which was the subject of a judgment opening

safeguard, receivership or liquidation or to those of the partners or

creditors of the legal person, to misappropriate or conceal, or to attempt to misappropriate or

conceal all or part of their property, or be fraudulently recognized as debtor of

sums they did not owe.

Article L654-15

The fact, for any person, of carrying out a professional activity or functions in violation of the

prohibitions, forfeitures or incapacity provided for in Articles L. 653-2 and L. 653-8, is punished by a

imprisonment for two years and a fine of 375,000 euros.

Section 3: Rules of procedure.

Article L654-16

For the application of the provisions of sections 1 and 2 of this chapter, the prescription of the action

public only runs from the day of the judgment opening the safeguard and recovery procedure

judicial or judicial liquidation when the incriminated facts appeared before that date.

Article L654-17

The criminal court is seized either on the prosecution of the public prosecutor, or on constitution of

civil party of the administrator, the legal representative, the employee representative, the

commissioner for the execution of the plan, the liquidator or the majority of the appointed creditors

supervisors acting in the collective interest of creditors when the legal representative having

quality to act has not acted, after a formal notice remained without follow-up within a time limit and

conditions set by decree in the Council of State.

Article L654-18

The public prosecutor may request from the administrator or the liquidator the delivery of all documents and

documents held by them.

Article L654-19

The costs of the lawsuit brought by the administrator, the legal representative, the representative of the

employees, the commissioner for the execution of the plan or the liquidator are supported by the Public Treasury,

in case of release.

In the event of a conviction, the Public Treasury cannot exercise its recourse against the debtor until after the

closure of judicial liquidation operations.

Article L654-20

The judgments and sentences handed down in application of this chapter are published in the

costs of the convicted person.

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