Two recent judgments of the Court of Cassation have come to recall a major principle in terms of universal transfer of assets, which occurred both after a dissolution without liquidation (article 1844-5 of the Civil Code) and after a simplified merger (article L.236 -3 of the Commercial Code):
The acquired company's right to take legal action is immediately transferred to the acquiring company.
The effect of a dissolution without liquidation of a company on the delays of an ongoing appeal procedure
The first judgment, delivered by the 2nd Civil Chamber of the Court of Cassation on May 20, 2021 ( Civ. 2, May 20, 2021, n°20-15.098, Published in the bulletin ), rules on the effect of a dissolution without liquidation of a company on the deadlines of an ongoing appeal procedure.
In this case, a company appealed against a judgment rendered by a commercial court. The appeal decision was the subject of a cassation, the service of which took place on September 26, 2017.
This company has since been the subject of a dissolution without liquidation, which became final on November 22, 2017, no opposition having been formulated within the legal period.
The acquiring company, coming under the rights of the acquired company by the effect of the universal transfer of assets, registered its statement of appeal on the following December 5.
However, it had a period of two months from the notification in part of the judgment rendered by the Court of Cassation, i.e. until November 26, 2017, to register the said statement of appeal at the registry of the court of dismissal (article 1034 of the Code of Civil Procedure , modified by the decree of May 6, 2017 (n°2017-891 – it was 4 months earlier!).
According to its decision rendered on May 20, 2021, the 2nd Civil Chamber dismissed the appeal against the judgment under which the Court of Appeal for Reference declared inadmissible the appeal registered on December 5 2017.
The question was as follows : is the operation of dissolution without liquidation a cause of interruption of proceedings?
Article 370 of the Code of Civil Procedure provides that " the proceedings are interrupted by:
- the death of a party in cases where the share is transferable; (…)
- the recovery or loss by a party of the ability to sue. »
The Court of Cassation responds, without detours and with care, on these two points:
- The dissolution of a legal person is not equivalent to the death of a natural person. It therefore does not constitute a cause of interruption of proceedings.
- The dissolution of the absorbed company results in the universal transmission of its assets to the absorbing company, which automatically acquires, from the date of the general meeting having approved the operation, the capacity to pursue the proceedings initiated by the absorbed company.
There is therefore no loss of the capacity to sue, but simply a transfer of said capacity for the benefit of the acquiring company.
Thus, as soon as the universal transfer of assets becomes definitive following the dissolution without liquidation of the acquired company, the acquiring company must take over and take the necessary steps to continue the procedures in progress , including the filing of a declaration of appeal within the legal time limit, even though the notification which causes the time limit to run has been made to the absorbed company.
This judgment is published in the bulletin, the Court having wished to highlight this solution.
The transmission of the capacity to act of the acquiring company upon the definitive completion of the simplified merger operation
The second judgment, delivered by the Commercial Chamber of the Court of Cassation on July 7, 2021 ( Com. July 7, 2021, No. 19-11.906, unpublished ), rules on the transfer of the acquiring company's standing from the final completion of the simplified merger operation.
In this case, an acquiring company had assigned a natural person, joint guarantor for a loan granted by the acquired company (following an assignment of debt between two banking establishments).
The debtor argued before the Court of Appeal that the simplified merger between the acquired company and the acquiring company, resulting in the universal transfer of assets to the benefit of the acquiring company, was not enforceable against him from the date of final completion of the operation, for lack of having been the subject of a legal publication.
The Court of Appeal accepted this argument on the grounds that the acquiring company would not have justified any publication of the simplified merger, rendering the transaction unenforceable against the debtor.
In pronouncing the quashing of this judgment, the High Court recalls the principle according to which, by the effect of the universal transfer of assets, the acquiring company has, as of right, from the date of the general meeting approving the operation , the capacity to act in justice, thus coming to the rights of the acquired company.
Beyond the fact that the Court of Appeal had not taken into account the documents showing the filing at the registry of the competent Commercial Court, in due time, of the minutes of the general meeting approving the operation, the Court of cassation considers that the universal transfer of assets had taken place as of right because of the general meeting approving the operation.
As a result, the acquiring company had standing to act in payment against the debtor of the absorbed company, having received the debt of the latter through the universal transfer of assets.
