Le Droit et Vous

Verification and eligibility of debts: Right for the creditor to appeal when the bankruptcy judge has not ratified the proposal of the judicial representative

Collective Proceedings

Source: Supreme Court, Commercial Chamber, June 16th 2015, n° 14-11.190

In accordance with the provisions of article L.624-3 paragraph 2 of the Commercial Code, the creditor whom debt is wholly or partly disputed and who has not answered the judicial representative within the delay mentioned in article L. 622-27 cannot make any appeal against the decision of the bankruptcy judge when it confirms the proposition of the creditors' representative.

A collective proceeding has been opened in respect of the society Seafrance. The society BP Marine Limited has declared a debt on June 18th 2010, but has not answered to the letter from the judicial representative dated October 20th 2010, informing him that part of his debt was contested.

Then the society appealed against the order of the bankruptcy judge who decided on the eligibility of his debt.

The court declared the appeal inadmissible, but noted that the bankruptcy judge had rejected the whole debt meanwhile the judicial representative had suggested only a partial rejection in his letter dated October 20th 2010.

The court considers, in accordance with the article L. 624-3, paragraph 2 of the Commercial Code, that the schedule provided by the law has as an objective to allow the progress of the collective proceeding in a reasonable period of time for all parties and that the rights of a creditor are not violated as long as the contestation proceeding is provided by the law and allows the access to a judge. It considers that the creditor perfectly knew it, when he did not respect the deadline to act in response of the whole or partial rejection of his debt.

The Supreme Court considers that the Court of Appeal has not drawn the legal consequences of its observations and has violated the sub mentioned article, by outlining, in its first paragraph, that according to the terms of this text, the creditor whom debt was wholly or partly disputed and who did not answer the judicial representative within the delay mentioned in the article L. 622-27 cannot appeal against the decision taken by the bankruptcy judge when it confirmed the proposal of the judicial representative of the creditors. On the other hand, the creditor has the right to make an appeal when the bankruptcy judge has not ratified the proposal of the judicial representative.

Agreements concluded by real estate professionals and information to clients: Entry into force of Decree 2015-724 dated June 24th 2015

Real Estate Law

Source: D. n° 2015-724, June 24th 2015 - JO June 26th 2015

The Decree n°2015-724 dated June 24th 2015, regulating the conditions under which the activities related to certain operations concerning properties and businesses can be exercised, is used for the application of the provisions of part I of article 24 of the Law n°2014-366 dated March 24th 2014, for the access to housing and a renovated urban planning.

Its objective is to regulate the agreements concluded by real estate professionals and the information to their clients, my amending:

- The Decree n°72-678 dated July 20th 1972, regulating the conditions of application of the Law n°70-9 dated January 2nd 1970.

- The Law n°70-9 dated January 2nd 1970, regulating the conditions under which the activities related to certain operations concerning properties and businesses can be exercised.

It applies to real estate professionals, persons entitled by the professional card's owner, institutions' directors, owners of the professional card showing the mention "Listing Trader", as well as their clients.

According to the decree, applicable from July 1st 2015:

- The amount owed in application of the clauses appearing in certain mandates given to professionals is now capped. Therefore, when a mandate comes with a clause of exclusivity or a penal clause, or when it includes a clause, in which terms the fees will be due by the principal even if the operation is concluded without a third party, this clause can only be applied if it results from a specific provision of a mandate, of which one original copy was given to the principal. This clause must be very clearly mentioned and cannot provide the payment of a sum superior to the amount of the fees indicated in the mandate for the operation to be realised.

Then, the decree specifies, in its articles 2 and 3, the conditions and the modalities of the reimbursement of the remuneration unduly paid to the listing trader.

As a reminder, the activity of listing trader consists in proposing to persons searching to rent a property, lists of owners, against a membership to this service. Listing traders are also called renting agencies with no commission.

From now on, under the provisions of articles 2 and 3 of the decree of June 24th 2015:

- The agreement concluded between the client and the owner of the card showing the mention: "Listing Trader" must specify its objective, its length, the characteristics of the property sought, the amount of the remuneration agreed, as well as the conditions of its partial or total reimbursement;

- The clause related to the conditions of reimbursement must be very clearly mentioned. It specifies that the client who seeks the reimbursement of the remuneration must inform the listing trader by writing, handed against signature or by Registered Letter with Acknowledgment of Receipt.

- Therefore the listing trader has a fifteen-day delay from the day when he handed his request or when the registered letter was first presented, to proceed with the reimbursement or motivate his refusal by writing.

- The reimbursement has to be made in one payment and no fees whatsoever can be incurred. The owner of the professional card makes this payment through the same method of payment that the one the client used to pay him in the first place, except a specific agreement from the client to use another method of payment.

- The agreement also reminds that it is forbidden for the card's owner to receive a payment prior to the perfect execution of his obligation to actually provide the lists or files (D. July 20th 1972, art. 79-2).

- The information provided in the article 4-1 of the Law dated January 2nd 1970 (information to the client by the professional prior to the conclusion of any contract with a company, potential direct links of a capitalistic or legal nature that they have with this company) has to be established by writing by the professional at the time when he proposes to his client the services of a company, a bank or a financial society. This written document, presented in a readable and understandable way, is given by the professional to his client at the same time as the proposal of services. The proof of delivery of this information can be made by any means. It must be kept by the professionals mentioned in article 4-1 (D. July 20th 1972, art. 95-2).

The enforceability of the executive director's resignation against the collective procedure

Civil Procedure and Collective Procedure
Source: Supreme Court, Commercial Chamber, May 12th 2015, n° 14-12.483

The president of a simplified joint-stock company gives his resignation on December 9th 2011, on the day when he was summoned to a meeting in front of the president of the Commercial Court, who was to decide on the opening of proceedings for the bankruptcy of the society, at a court hearing on December 15th 2011.
By a judgement dated February 21st 2012, the Commercial Court has, with no consultation, opened proceedings for the bankruptcy of the said society.
The former president, who contested the date chosen for the suspension of payments, instituted himself third-party in the proceedings against this judgement.
The Court of Appeal declared his request as third party inadmissible, considering that the resignation had not been subject to any legal advertising formalities, and in consequence, he was still related to the society, including the Commercial Court, its legal representative at the date of the opening judgement.
Therefore he was not third-party to the proceedings.
In accordance with the article 583 of the Civil Procedure Code, the Supreme Court has dismissed the decision and considered on the contrary that, «as M. Y. was no longer executive director, due to his resignation, which happened on December 9th 2011, it did not matter whether this resignation had been subject to legal advertising measures or not, the result was that he was not part of the society's legal representatives at the time of the opening of the first instance proceedings in front of the Commercial Court, hence the Court of Appeal has violated the above mentioned article.»