Treasury Management Agreements Between Sister Companies

Extract

[...] 511-7-I-3° of the Monetary and Financial Code, which initially seemed to limit these operations to companies linked by capital links conferring effective control power. - By validating the treasury conventions between companies controlled by the same physical person, the judgment introduces the notion of 'personal groups'. This approach could be criticized for its lack of explicit legal foundation and the potential risks it generates in terms of financial transparency and creditor protection. - The judgment does not provide a precise definition of the individual entrepreneur in this context, leaving room for various and potentially contradictory interpretations, which could harm legal security. [...]

[...] The Court deduces that the conditions for effective control provided for by Article L. 511-7-3 of the Monetary and Financial Code were met between these two sister companies at the time of the signature of the treasury management agreement. It matters little that this control is exercised by a physical person as an individual entrepreneur or as a manager of companies. Thus, the treasury management agreement is valid and benefits from the derogation from the banking monopoly provided for by the law. Jean-Jacques Daigre ? [...]

[...] The Court of Appeal of Douai, by a judgment of 24 January 2002, condemns the sole partner, in his capacity as endorser, to repay the claim arising from a treasury management agreement. The latter files a cassation appeal, invoking, inter alia, the nullity of the agreements in question. The treasury management agreements concluded between sister companies, directed by the same physical person holding majority or equal participations in these companies, are they valid in light of the provisions related to the banking monopoly (notably article L. [...]