Extension of Collective Procedure to Combat Patrimonial Detours

Extract

[...] A landlord faced with such a debt would have had to react through appropriate legal means: a summons, a payment order, or a judicial action to terminate the lease. However, here, no diligence has been undertaken. No measure has been taken to obtain payment of the rental claim. This inertia raises questions, as it does not seem to proceed from simple laxity. It translates excessive tolerance. It suggests a deliberate will to maintain the economic balance of Smartinvest by delaying, or even neutralizing, the exigibility of its rental debt.Com July 2012, Rev. proc. [...]

[...] A jurisprudential validation based on a global assessment The extension of a collective procedure can only be considered with extreme prudence. It implies a challenge to the fundamental principle of patrimonial autonomy. It leads to consequences of particular gravity. In this regard, it can only be ordered if the confusion of assets is demonstrated with absolute certainty. Articles L. 621-2 and L. 641-1 of the Commercial Code strictly enclose this faculty. But the jurisprudence has specified that this measure cannot be based on a random criterion. [...]

[...] The extension of the collective procedure thus becomes an instrument for correcting structural misuses, guaranteeing the protection of creditors and the effectiveness of the law on companies in difficulty. It is also necessary to ask: how does the Court of Cassation consecrate the extension of a collective procedure in the presence of suspicious financial relationships between two companies? A thorough examination of this decision leads to analyzing, at first glance, the consecration of a bundle of indices as a determining criterion for the confusion of patrimonies), before studying the implications of this judgment, which erects the extension of the collective procedure into an instrument for combating strategic insolvencyII). [...]

[...] A structuring jurisprudence in favor of the transparency of relations inter-sociétés The extension of collective proceedings does not only impose a sanction. It produces a structuring effect on inter-company relations. It imposes a more rigorous financial management. By doing so, it sets up safeguards against the instrumentalization of legal structures as screens for default. From now on, a company will no longer be able to maintain economic links with a debtor in difficulty without assuming the consequences if it favors, through its inertia, a biased distribution of the debt. [...]

[...] It is, in the end, an instrument of « patrimonial truth » and of « contractual justice». [...]