Cas. crim, Nov. 25, 2020, n°19-85.205, F-P+B+I
Under the terms of a landmark judgment delivered on November 25, 2020, the Court of Cassation provided details on the offense of bankruptcy.
In this case, managers of a civil real estate company (SCI) which had been the subject of a receivership procedure were prosecuted for bankruptcy by use of ruinous means, irregular bookkeeping and lack of bookkeeping, after the The temporary administrator sent the public prosecutor's office an accountant's report revealing these irregularities.
The defendants had been convicted at first instance but acquitted by the Court of Appeal, which, like the Criminal Court which had advanced the date of cessation of payments to 2012, had aligned itself with the date retained by the Court of High Court, i.e. 2013.
The Court of Appeal had not denied the irregularity of the keeping of the accounts in 2011, then the absence of accounts from 2012 to 2013, it had, however, noted several factual circumstances preventing it from considering that these facts had taken place "with the aim pursued by the defendants of delaying the recognition of the state of cessation of payments or of affecting the assets of the SCI under conditions which would make it impossible for it to meet the liabilities payable” .
In addition, after analyzing the personality of the defendants, as well as the background of the company, its compliance with the recovery plan and the subsequent continuation of its activity, the Court of Appeal had ruled out "the thesis according to which they would have had the intention to artificially maintain the activity of the latter before the date of cessation of payments as fixed by the tribunal de grande instance”.
The leaders then decided to lodge an appeal in cassation. Could the managers be prosecuted even though the alleged acts had been committed before the date of cessation of payments? The release stop is broken.
The Court of Cassation considered that "if the cessation of payments, noted by the judgment opening reorganization or judicial liquidation proceedings, is a necessary precondition for the exercise of proceedings for heads of bankruptcy by use of ruinous means, keeping of manifestly irregular accounts or absence of accounts, its date has no effect on the characterization of these offences, which can be retained indifferently for acts committed before or after the cessation of payments ”.
It being specified that, under the terms of this judgment, the Court of Cassation showed great severity when it found in the endorsement of Articles L.654-2 4° and 5° of the Commercial Code and Article 121- 3 of the Penal Code that “ the characterization of the intentional element of the offenses of bankruptcy by absence of accounts or keeping of manifestly irregular accounts supposes the sole awareness of its author of evading his legal accounting obligations (…) does no proof that the defendant had the will either to avoid or to delay the observation of the state of cessation of payments , or to affect the consistency of the assets available under conditions likely to place the interested party in the impossibility of meeting the payable liabilities”.
