Lawyer in receivership

Your company can no longer meet its debts. A creditor takes you to the Commercial Court, or you yourself have to declare that payments have stopped. On the other hand, you are the creditor of a company that has been placed in liquidation and your invoices remain unpaid. In both cases, the deadlines are short and the consequences severe. Our law firm assists both directors and creditors at every stage of the liquidation procedure.

Directors: protect your assets and prepare for the future

You realise that your company can no longer pay its debts as they fall due with its available cash. This is the cessation of payments - the legal trigger for the procedure. You have 45 days to declare it to the commercial court registry. If you fail to do so, you may be personally disqualified from managing the business, or you may be required to pay off the company's debts.

Liquidation is not always inevitable. Before it comes to that, there are other options: conciliation, ad hoc mandate, safeguard, receivership. The involvement of a lawyer upstream enables you to assess which collective procedure is best suited to your situation and to prepare your case in the best possible conditions. But if recovery is clearly impossible, it is better to anticipate liquidation rather than suffer it.

Article L640-1 of the French Commercial Code

«Judicial liquidation proceedings are hereby instituted for any debtor who has ceased payments and whose recovery is manifestly impossible. The purpose of judicial liquidation proceedings is to put an end to the business or to realise the debtor's assets through a global or separate transfer of his rights and property». Two cumulative conditions: cessation of payments (available assets less than liabilities due) and manifest impossibility of turning the business around.

Our firm handles

Analysis of the financial situation and assessment of the state of suspension of payments
Preparation of the declaration of suspension of payments and the bankruptcy petition file
Representation of the manager at the opening hearing before the commercial court
Defence against actions to cover liabilities (art. L651-2 C.com) and applications for a management ban
Protection of directors' personal assets and guarantors
Support in relations with the liquidator and the official receiver
Challenging the opening judgment on appeal (time limit : 10 days)
Advice on bouncing back: professional recovery, setting up a new business after closure

Creditor: asserting your rights in the procedure

Your debtor has just been placed in compulsory liquidation. Your bills, loans and commercial rents will no longer be paid under the usual conditions. From now on, the liquidator will administer the debtor's assets. Individual legal proceedings are suspended and the debt declaration becomes your only lever.

The deadline is strict: two months from the date of publication in the BODACC to declare your claim to the judicial representative. Once this deadline has passed, the foreclosure will deprive you of any right to the distribution of assets. The claims verification procedure may then give rise to disputes - over the amount, the ranking of liens or the very existence of the claim.

Our firm handles

Declaration of claim in the legal form and within the legal time limits
Property claims (retention-of-title clauses, leasing)
Defence of lien ranking (secured creditors, pledges, mortgages)
Contesting the admission or rejection of your claim before the official receiver
Monitoring the realisation of assets and participating in disposal operations
Resumption of individual proceedings after closure for insufficiency of assets

The judicial liquidation procedure in practice

Judicial liquidation is the most radical of the collective procedures. As soon as the judgement is handed down, the director is relieved of the management of the business. A court-appointed liquidator takes over to verify the claims, realise the assets and distribute the proceeds among the creditors according to the order of priority. The procedure can last from a few months (simplified judicial liquidation) to several years for complex cases.

The 7 stages of the compulsory liquidation procedure

Cessation of payments

Referral to the court

Opening judgment

Divestment

Verification of receivables

Realisation of assets

Fence

Cases may be referred to the Commercial Court by the debtor itself (filing for bankruptcy), by a creditor or by the public prosecutor. The opening hearing is the decisive moment: this is when the classification of the proceedings - liquidation or reorganisation - is decided. The director's lawyer presents the arguments in favour of reorganisation if there are prospects, or prepares for liquidation under the most protective conditions.

After the judgment, the liquidator takes over. He makes an inventory of the assets, verifies the claims declared and proceeds with the sale of the assets - by mutual agreement or by auction, under the authority of the official receiver. Employees are made redundant and their claims are covered by the AGS up to the legal maximums.

The company is closed either because its liabilities have been extinguished (rare), or because it has insufficient assets. In the latter case, the director can resume his or her entrepreneurial freedom - unless the court has ordered personal bankruptcy or a ban on managing the business, sanctions reserved for the most serious management faults.

Simplified or traditional judicial liquidation?

	Simplified	Classic
Conditions	No property, turnover < EUR 750 000, fewer than 5 employees	All other cases
Duration	6 to 12 months maximum	No fixed limit - often 2 to 5 years
Sale of assets	Simplified auction or private treaty sale	Complete procedures under the authority of the official receiver
Verification of receivables	Simplified (the liquidator draws up the statement)	Complete with possibility of dispute

Do you need a bankruptcy lawyer?

Whether you are an executive or a creditor, we will analyse your situation and define the strategy best suited to your interests.

MAKE AN APPOINTMENT

Frequently asked questions

Do I need a lawyer for a compulsory liquidation?

Representation by a lawyer is not compulsory before the Commercial Court. However, liquidation proceedings are technically complex, and the personal stakes for the company director are considerable: the risk of having to pay off liabilities, of being banned from managing the business, of having personal guarantors called into question. Lawyers are called in to provide security at every stage, from filing for bankruptcy to closing the business. For creditors, a lawyer is essential in order to declare the claim properly, defend its priority ranking and contest any rejections.

What is the deadline for declaring the cessation of payments?

Directors have 45 days from the date on which payments cease to be made to file their declaration with the commercial court registry. This period is suspended if a conciliation procedure is in progress. Failure to comply with this time limit constitutes a fault that may give rise to an action for a management ban or personal bankruptcy.

How much does a bankruptcy lawyer cost?

Fees depend on the complexity of the case: the size of the company, the number of creditors, the existence of related disputes (payment of liabilities, disputed claims). We suggest an initial meeting to assess your situation and provide you with a detailed fee agreement before any intervention. Legal aid is available on a means-tested basis for individual directors.

Is it possible to set up a new company after a compulsory liquidation?

Yes, unless the court has ordered personal bankruptcy or a management ban. Closure of the liquidation due to insufficient assets does not prevent the creation of a new business. Under articles L645-1 et seq. of the French Commercial Code, individual entrepreneurs who meet the conditions can even have their debts written off.

Can a court-ordered liquidation be contested?

An appeal may be lodged against the opening judgment within 10 days. The appeal does not suspend enforcement of the judgment, but it is possible to apply to the First President of the Court of Appeal to have provisional enforcement suspended. The appeal may relate to the existence of the cessation of payments or to the manifest impossibility of reorganisation.

Does the firm intervene in an emergency?

Yes, a creditor's summons to appear before the Commercial Court, a notice to appear at an opening hearing or a request to cover liabilities all require a rapid response. We deal with urgent cases and intervene within deadlines adapted to procedural constraints.

Guides - Collective proceedings

Collective proceedings ->

Insolvency proceedings are not the end of the story: they are a chapter in it, sometimes a decisive one. Safeguard, reorganisation or compulsory liquidation, Book VI of the French Commercial Code offers very different tools depending on whether you are a company director looking to bounce back or a creditor looking to collect. This guide maps out this area to help you understand who does what, when and why.

18 articles on this theme ->

Our resources

629

Articles

Analyses, feedback and legal news. Updated daily.

See the blog ->

Files

Encyclopaedic treatises of 80 to 150 pages from our professional training courses.

See the files ->

Training

Qualiopi-certified, delivered by law schools and training organisations.

See the courses ->

Let's talk about your file

Do you have a commercial or banking dispute or an enforcement procedure in progress? We can discuss it with you.