The declaration of claims is the first step to be taken by a creditor of an insolvent company in order to preserve its rights in the insolvency proceedings and must be drafted with the utmost care. Indeed, the declaration of claims entitles the creditor to participate in the allocation of funds and the distribution of dividends. A creditor who fails to declare its claims shall be excluded from participating.
Under French Insolvency Law, the debts must be declared to the “mandataire judiciaire” (a special court-appointed agent) within two months from the publication in the “Bulletin officiel des annonces civiles et commerciales” (French legal gazette) (the “BODACC”) of a notice of the judgment opening the insolvency proceedings. Creditors not domiciled in France are granted an additional period of two month, so to file their claim. Consequently, foreign creditors are granted a four-month time period (Article R.622-24 of the French commercial code) (the “Code”).
However, French law offers a possibility to declare the claims after the expiration of this time period. Article L.622-26 of the Code provides that a creditor may file a request before the “juge commissaire” (dedicated judge appointed to supervise the insolvency proceedings) allowing him to declare his claims after the period has expired. This procedure is called “relevé de forclusion”. This request must be filed:
- within six months from the publication in the BODACC of a notice of the judgment opening the insolvency proceedings; or
- within one year from this publication for the creditors who were not aware of the existence of the debt before the expiration of the aforementioned time limit.
A few months ago, however, the French Supreme Court (decision n°13-40.034, dated
5 September 2013) decided that such strict time limits cannot be applied where it was impossible for a creditor to act during the course of the delay (i.e. “contra non valentem agere non currit praescriptio”).
The barred creditor will have to prove that the failure to declare its claims on time was not the result of its negligence, or that the delay is due to the omission of the creditor’s name from the list of creditors drawn up by the debtor at the opening of the proceedings.
This rule also applies to European creditors not domiciled in France. In addition to the rules of French Insolvency Law, the rules of the Council Regulation n°1346/2000 dated 29 May 2000 shall also apply to the declaration of claims by European creditors.
Articles 40 and 42 of the Council Regulation n°1346 / 2000 oblige the Court of the Member State opening of the proceedings or the court-appointed mandataire judiciaire to inform the known creditors who have their habitual residence, domicile or registered offices in other Member States.
Article 40 provides that “information provided by an individual notice, shall in particular include the time limits, the penalties laid down in regard to those time limits, the body or authority empowered to accept the lodging of claims and the other measures laid down. Such notice shall also indicate whether creditors whose claims are preferential or secured in rem need to lodge their claims”. European creditors shall be individually informed of the insolvency proceedings of their debtor in order to declare their claims. A special form is to be used to send this notice. Article 42 of the Council Regulation provides that “a form shall be used bearing the heading ‘Invitation to lodge a claim’” in one of the official languages of the Member State opening the insolvency proceedings. However, the Council Regulation n°1346/2000 does not provide for the consequences where there is a failure to inform the creditor.
An interesting decision of the French Supreme Court was handed down on 17 December 2013 n°12-26.411 on this issue. A Dutch creditor of a company placed in Sauvegarde proceedings declared its claims as an ordinary creditor after the expiry of the four-month time period allocated to foreign creditors. Therefore, the creditor filed a request for a "relevé de forclusion". The Court of Appeal approved this request.
The debtor and its "mandataire judiciaire" challenged the decision.
The French Supreme Court upheld the decision of the appeal judges. The Court held that since no sanction is provided by the Council Regulation n°1346/2000, it is up to the Member State of the opening judgment to determine the consequences of the failure to inform the creditor. In France, only the "relevé de forclusion" procedure is available and since the creditor had not been individually informed by the "Mandataire judiciaire" of the opening of the insolvency proceedings under the rules of the Council Regulation, failure to declare its claims on time was not due to its negligence. As a consequence, the conditions for the "relevé de forclusion" were fullfiled and the Court of Appeal had justified its decision.
This decision is favorable to European creditors as it allows them to declare their claims after the expiry of the four month period in cases where the agent appointed by the Court of the relevant Member State (i.e the "mandataire judiciaire" in France) did not follow the provisions of Council Regulation n°1346/2000.