Judicial Reorganization: Termination of Lease and Right of Retention

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Judicial Reorganization: Termination of Lease and Right of Retention

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Judicial reorganization, collective procedure, Court of Cassation, lease termination, resolutoire clause, right of retention, prior claim, judicial restructuring, payment order, regularization period, contestation of termination, SARL CANARD GERSOIS, supplier claim, contract continuation, administrator decision, claim restriction, judicial reorganization procedure, suspicious period, annulment of acts, Article L6227 Ccom, Article L62217 Ccom, connected claims, alimentary claims, observation period, creditor privilege, warehouse lease, nonpayment of rent, rent claim, inopposability, retained asset, entrusted asset, collective regime, Cassation, Nanterre Commercial Court, judicial trustee, claim maturity, service provision, unfolding of procedure, needs of procedure, legal action, payment restriction, freezing of claim, lessor right, tenant regularization, termination contestation, reorganization opening judgment, claim classification, subsequent claims, prior claims, claim payment, creditor notification, one-year period, privilege loss, ordinary claims, legal consequences, suspicious period acts, stock sale, real value, judgment opening date, January 13 2025, December 2024 rent, lease contract, contract termination, right of retention opposition, garage owner claim, vehicle repair, repaired vehicle return refusal, invoices payment, case law, commercial law, French Commercial Code, Ccom, legal principle, recent case law, commercial court ruling, judicial reorganization consequences, collective procedure implications, creditor rights, debtor obligations, reorganization effects, claim treatment, contract continuation decision, administrator role, judicial trustee role, claim classification criteria, claim payment conditions, unfolding of collective procedure, observation period needs, service provision counterpart, creditor notification period, claim privilege loss, ordinary claim assimilation, legal action admissibility, payment restriction applicability, claim freezing reasons, lessor rights, tenant obligations, lease contract termination conditions, right of retention opposability, garage owner rights, entrusted vehicle, collective procedure opposability, reorganization judgment effects, prior claim treatment, subsequent claim treatment, claim maturity conditions, service provision requirements, unfolding of procedure needs, creditor rights implications, debtor obligations implications, reorganization consequences on contracts, lease contract continuation, administrator decision-making, judicial trustee role in claim treatment, claim classification implications, claim payment conditions applicability, collective procedure implications on creditor rights, debtor obligations during reorganization, reorganization effects on contracts and claims

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Abstract
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Abstract

The Court of Cassation has ruled on the termination of lease and right of retention in the context of judicial reorganization, providing clarity on the opposability of claims prior to the opening judgment.

Extract

[...] In law, The suspicious period, defined by Article L. 632-1 of the C. com, corresponds to the time interval that separates the date of cessation of payments, set by the court, from the date of the judgment opening the collective procedure. During this period, certain acts of the debtor are annulable in order to prevent the latter from favoring certain creditors or organizing the impoverishment of his company in order to circumvent the principle of equality between creditors. Article L. [...]

[...] However, retaining the vehicle could put the continuity of the SARL CANARD GERSOIS's activity at risk. The refrigerated truck is essential to the proper functioning of the company, as it is used to deliver professional clients. Without this vehicle, the operation is likely to be severely disrupted, thus compromising the chances of the company's recovery. In these circumstances, the judge-commissioner may intervene and order the lifting of the right of retention, in application of article L. 622-7 of the C. com. [...]

[...] Thus, in principle, the lessor cannot request the termination of the lease for default of payment of a prior rent before the opening of the judicial restructuring. In this case, The SARL CANARD GERSOIS was placed in judicial restructuring on January and the lessor is claiming the termination of the lease contract due to non-payment of the December 2024 rent, which constitutes a prior claim to the opening of the collective procedure. The lessor's action collides with the principle that prohibits any action for payment or termination of a contract for default of payment of a prior claim. [...]

[...] In conclusion, the supplier of jars is legitimate in his demand for payment of his posterior claim. In this capacity, he can act in justice, obtain an enforceable title and take all the steps to recover the amount due by the SARL. The rules of collective procedure cannot stand in the way. However, the judicial administrator, Mr. Benjamin, could try to appease the conflict and negotiate a payment deadline with the supplier in order to preserve the SARL's treasury. On this last point, it is necessary to specify that the administrator's proposal in no way engages the creditor, who can always choose to exercise his right to pursue. [...]

[...] In this context, the jurisprudence is protective of the tenant. In fact, the resolutoire clause cannot play automatically during the period of judicial reorganization. The Court of Cassation has ruled that the termination of the lease can only be invoked against the debtor if the resolutoire clause has produced all its effects before the judgment of opening, that is to say if : - The lessor has issued a payment order before the opening of the judicial reorganization; - The one-month period granted to the tenant to regularize the situation had expired before the opening of the reorganization; - No contestation of the termination was underway. [...]

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