Merger absorption, sub-guarantor commitment, acquiring company liability, Court of Cassation, Commercial Chamber, universal transfer of assets, guarantee commitments, credit protection
Reader
Abstract
Extract
of 3
Abstract
Court of Cassation rules on acquiring company's liability for sub-guarantor commitment after merger-absorption.
Extract
[...] She expresses the hope that this decision serve as a foundation for a future turnaround in the case of the absorption of the surety creditor, where the jurisprudence remains still rigid. Class Notes The merger leads to the dissolution without liquidation of the company ? So TUP in the state of definitive realization of the operation, making it that in case of absorption, the absorbed company had to subscribe to an engagement in the terms of this one (transmission of the sub-guarantee without information). [...]
[...] He notes that the Court has abandoned a more rigid previous jurisprudence, and lays the foundations for increased protection of credit. - Dorothée Gallois-Cochet ? Position: Nuanced but overall positive ? She emphasizes the unprecedented nature of the ruling, noting that it is the first time the Court has ruled on the absorption of the surety, and not the debtor or the creditor. ? She notes that the Court's solution stands in opposition to that defended by a dominant doctrine (Simler, Delebecque, Picod?), who considered that the merger brought an end to the coverage obligation. [...]
[...] It is in line with previous case law, notably a judgment of November which had already recognized this transfer of guarantee commitments in the event of a merger. To date, this case law position has not been challenged. Doctrine : - Henri Hovasse ? Position : Very favorable and engaged ? The salutes a "return to reason", a solution simpler, more protective, based on the contractual coherence rather than technical distinctions (such as that between coverage and regulation). ? The criticizes these distinctions as 'torturing the surety contract', preferring a unitary vision: the surety contract has a unique objective. [...]
[...] Procedure : The guarantee company assigned the acquiring bank to enforce its sub-guarantor commitment. The Paris Court of Appeal, in a ruling of 11 April 2012, condemned the acquiring bank to pay to the guarantee company the amount claimed. The acquiring bank then filed a cassation appeal. Question of law : The question posed to the Court of Cassation was whether, in the event of a merger-absorption of a company that had subscribed a sub-guarantor commitment, the acquiring company is required to execute this commitment, including for debts arising after the merger. [...]
