Declaration of claims & Covid-19: how to control deadlines

The declaration of claim is a very important act for the creditor. Its realization is complicated by the period of Covid-19. The purpose of this communication is to raise awareness of this complication and the calculations to be made, on a case-by-case basis, and the three elements to be taken into consideration:

• End date of the state of health emergency (as it stands May 24 at midnight)
• End date of the legally protected period (as it stands May 24 + 1 month, i.e. June 24 at midnight)
• Expiry date of the initial period (example: 2 months in principle for the declaration of claim)

Emergency law n°2020-290 of March 23, 2020 to deal with the Covid-19 epidemic notably established a state of health emergency and enabled the Government to adopt, by ordinances, emergency measures related to the Coronavirus-Covid-19 crisis.
In this context, two ordinances were adopted in particular:

Ordinance No. 2020-306 of March 25, 2020 relating to the extension of the deadlines expired during the period of health emergency and the adaptation of procedures during this same period;

Ordinance No. 2020-341 of March 27, 2020 adapting the rules relating to the difficulties of businesses and agricultural operations to the health emergency and modifying certain provisions of criminal procedure, which temporarily adapts the procedures applicable to these actors, in order to take into account account of their conditions of implementation during the state of health emergency and the months following its end. It is to this first order to which it is advisable to refer to know the methods according to which the creditor must declare his claim to the liabilities of the debtor during the period of health emergency.

What the common law provides (art. L622-24 commercial code)

Domain of the declaration

The declaration of claim is a procedural act by which the creditor expresses his wish to be paid in the collective proceedings of the debtor. The obligation to declare one's claim imposed on creditors is the counterpart of the prohibition of payments.

• Only claims in sums of money must be declared;
• It matters little whether the claim is simply contingent or conditional.

Terms of the declaration

• It may be made by the creditor or by any servant or agent of his choice;
• It must be addressed in writing to the legal representative or to the judicial liquidator;
• It must be carried out within two months (*) following the publication of the judgment opening the proceedings in BODACC.

What is provided for by Ordinance No. 2020-306 of March 25, 2020

Article 2 of Ordinance 2020-306 provides that:

"Any act, recourse, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation under penalty of nullity, sanction, lapse, foreclosure, prescription, unenforceability, inadmissibility, expiry, automatic withdrawal, application of a special regime, void or forfeiture of any right whatsoever and which should have been completed during the period mentioned in Article 1 will be deemed to have been completed on time if it was completed within a time limit which cannot exceed, from the end of this period, the time limit legally set for any act, appeal, legal action, formality, act, within the limit of two months[…]”

In practice: This article applies, unless special provision to the contrary, to all periods which have expired or which expire between March 12, 2020 and the expiration of a period of one month from the date of cessation of the state of health emergency declared under the conditions of article 4 of the emergency law of March 23, 2020, i.e., as it stands, June 24, 2020. (May 24, 2020 +1 month = "period legally protected" )

The acts prescribed by law or regulation and which had to be carried out during this period may be carried out within two months after this period.

Application of the provisions to the declaration of claim

The deadline for filing a claim falls within the scope of this article 2 of Ordinance No. 2020-306 since the two-month deadline (see below for possible extensions of deadlines) following the publication of the judgment opening to the BODACC left to the creditor is provided for on pain of foreclosure. (articles L.622-24 and R.622-24 of the C.com

If this period expires between March 12, 2020 and the expiry of the "legally protected period", the creditor may validly declare his claim within two months of the expiry of this period, i.e. within three months following the expiration of the state of health emergency, without having to ask to be relieved of the foreclosure.

On the other hand, if the time limit for the declaration of claim begins to run during the protection period and expires afterwards, the creditor will not benefit from any suspension or interruption of the time limits.

Concrete examples (taking into consideration as the end date of the state of health emergency May 24, 2020 at midnight)

Example #1:

Opening judgment published on February 1, 2020

Period expiring on March 31, 2020, being extended to August 24, 2020 (May 24 + 1 month + 2 months)

Example 2:

Opening judgment rendered on March 10, 2020 published on March 20, 2020

Period expiring on May 20, 2020, being extended to August 24, 2020 (idem)

Example #3:

Opening judgment rendered on March 14, 2020 published on March 28, 2020

Deadline expiring on May 28, 2020 being extended to August 24, 2020 (idem)

Example #4:

Opening judgment rendered on March 20, 2020 published on May 2, 2020

Deadline expiring on July 2, 2020, not being extended

Example #5:

Opening judgment rendered on June 14, 2020 published on June 28, 2020

Deadline expiring on August 28, 2020, not being extended

Beware of increased reporting deadlines

Article R.622-24 of the Commercial Code provides:

“When the procedure is opened by a court which has its seat in the territory of metropolitan France, the declaration period is increased by two months for creditors who do not live in this territory”. “When the procedure is opened by a court which has its seat in an overseas department or community, the declaration period is increased by two months for creditors who do not live in this department or this community”.

Result

The aforementioned calculations must possibly take into account the date of expiry of the declaration period resulting from these increases in the two-month period (which may result in less favorable treatment for their beneficiaries than for creditors who must make their declaration within the normal period two months)

Vigilance is key

In addition to the precautions that should be taken when drafting the declaration (and with regard to the methods of sending it to guarantee that it is properly received in the current context), which must not only be unequivocal but also indicate the amount of the debt including, where applicable, penalties and interest and possibly any securities held, the creditor must be particularly attentive to compliance with the deadlines under penalty of having his debt declared unenforceable in the collective proceedings. It will therefore be appropriate for the creditor to be particularly vigilant, even if the statement of foreclosure may be requested under certain conditions. If it is to be feared that many companies will request, at the end of the state of health emergency, the opening of collective proceedings for their benefit, such proceedings may be opened during this period, as that was the case a few days ago for the André shoe brand.