The seizure of intangible rights necessarily leads to their sale. To fully understand this final stage, it is essential to first understand the definition and scope of the seizure of intangible rights. The procedure then varies according to the nature of the rights seized: shareholder rights, listed or unlisted securities.
Listed and unlisted rights: two distinct regimes
The Code of Civil Enforcement Procedures distinguishes between :
- Securities "admitted to trading on a regulated market or a multilateral trading facility" (listed rights)
- Shareholder rights and unlisted securities
This distinction determines the applicable procedure. For an in-depth understanding of the seizure and specific sale of securitiesYou can consult our detailed guide for both listed and unlisted shares. For listed rights, the sale is simply carried out at the market price. For unlisted rights, an auction is required, with specifications drawn up.
Amicable sale: priority to the debtor
In both cases, the debtor has one month following notification of the seizure to organise an out-of-court sale.
In the case of listed securities, the creditor gives the sale order to the investment services provider. The creditor has no say in the price, unlike in a conventional seizure and sale.
For unlisted rights, the debtor notifies the court-appointed administrator of the proposals received. The administrator informs the creditors, who have 15 days to comment. Their silence is deemed to constitute acceptance.
The price is then paid to the court commissioner. If the sum is sufficient, unavailability ceases for the remaining rights.
Preparing for the forced sale
Preparing for a forced sale is a crucial stage. If you want a detailed practical guide to the procedure for seizing intangible rightsIf you would like to find out more about the process, including all the preliminary stages of the sale, please see our dedicated article. In the absence of an amicable sale, the creditor may request a compulsory sale if :
- No dispute was lodged within one month of the denunciation.
- Or if the judge has rejected the challenge
In the case of listed rights, the investor contacts the investment services provider. For unlisted rights, the auction requires careful preparation.
The debate continues as to who can carry out the auction. Since the Order of 2 June 2016 on the status of judicial commissioner, notaries appear to be competing with judicial commissioners, although their traditional competence has not been called into question.
Specifications: a crucial stage for unlisted rights
This document must mention :
- A reminder of the previous procedure
- The company's articles of association
- Any document required to assess the value of the rights
- Agreements of approval or preferential rights (to be enforceable against the winning bidder)
The specifications are notified to the company, which informs the shareholders. Opposing creditors receive a summons. Interested parties have two months to submit their observations.
This document may mention the upset price, which the debtor cannot contest until a recent decision by the Constitutional Council made it possible to do so.
Publication and notification
The sale is advertised in the press "not more than one month and not less than fifteen days" before the sale. It may also be posted.
The date of sale is notified to the debtor, the company and the opposing creditors. This notification enables the members of a non-trading company to exercise their right to dissolve or repurchase, as provided for in article 1868 of the Civil Code.
The auction: a controlled sale
The sale is conducted in the same way as a traditional auction: to the highest bidder, after three calls for bids, with cash payment. The principle of proportionality allows the sale to be stopped as soon as the price reached covers the sums due.
However, article R. 233-9 of the French Code of Civil Enforcement Procedures makes the sale subject to "legal and contractual procedures for approval, pre-emption or substitution". This is why the forced sale of shareholders' rights is a particularly complex method of enforcement. The rights of the partners therefore take precedence over those of the successful bidder.
The rules differ depending on the type of company:
- Non-trading companies: right of substitution within 5 days
- SNC: unanimous consent of partners
- SARL: majority of partners representing half of the shares
- SA and SAS: statutory approval clause possible if not listed
This primacy of company law compromises the effectiveness of the seizure. Potential bidders are discouraged by the risk of the auction being called into question.
Prize distribution
The proceeds of the sale are divided between the distraining creditors and the opposing creditors who appeared before the sale.
If a precautionary seizure has been carried out, the sums due to the person making the seizure will be deposited until a writ of execution and a conversion deed are obtained.
If the successful bidder refuses to agree, the repurchase price may be set by an expert in accordance with article 1843-4 of the French Civil Code. This solution is questionable for an auction that already establishes an objective value. Faced with these complexities, it is essential to obtain be accompanied by a lawyer specialising in forced sales of company shares to secure your rights and optimise collection.
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