Guarantor's Obligation in Merger-Absorption

Extract

[...] Subsequently, the creditor bank was absorbed by another bank as part of a merger. After the judicial liquidation of the debtor company, the absorbing bank requested the enforcement of the guarantor's commitments. Procedure : The absorbing bank assigned the guarantor for payment. The appeals court condemned the guarantor to pay the claimed amounts, finding that the guarantor had accepted the creditor substitution in a non-equivocal manner by signing, in their capacity as director of the debtor company, a credit extension offer. The guarantor appealed to the cassation court. [...]

[...] Thus, the judgment of June reaffirms the importance of the guarantor's express will for the extension of their commitment to the absorbing company. Doctrine : ? Philippe Simler and Philippe Delebecque - The merger or absorption of the creditor bank entails extinction of the guarantor's obligation to cover : This solution, which is quite classic, is only worth recalling because a doctrinal current had recommended the opposite solution and believed to see in a judgment of 8 November 2005, differently interpreted, the beginning of a reversal. [...]

[...] - Fundamental principle reaffirmed: the requirement of an express manifestation Cerles applauds the rigor of the 2009 judgment, which comes to correct the extensive interpretation made in 2005. He insists on the fundamental distinction between: ? the automatic transmission of the guaranteed debt (which can exist via merger), and the extension of the surety, which supposes an explicit consent." ? He denounces the idea that a passive or ambiguous behavior of the surety could be sufficient to engage its post-merger liability. He speaks of a 'passive behavior' that cannot be interpreted as 'tacit acceptance': only 'proof of explicit commitment' is admissible. [...]

[...] Cerles compares this ruling with: - From a ruling of the 1st Civ Sept (n° 03-10.810), to emphasize the need to precisely date the birth of the debt, - And rulings Com May 1978 and 20 Jan to show the historical consistency of the 2009 solution with the previous jurisprudence. Class Notes It was not enough to have accepted the substitution of creditor What do we deduce from this ? ? These are contracts intuitu personae: one engages only with the knowledge of the other party in front. [...]

[...] Alain Cerles - Portée of the judgment according to Cerles ? Alain Cerles considers that this judgment of the Court of Cassation brings an end to a rich doctrinal debate that followed a previous judgment of 8 November 2005 (Com., n° 01-12.896). He describes the judgment of 30 June 2009 as clarificatory, in that it restores traditional jurisprudence: the obligation of the surety towards the new creditor arising from a merger-absorption only subsists if the surety has explicitly manifested their intention to engage with the absorbing company. [...]