Filing a claim is a crucial step for a property owner in insolvency proceedings. The COVID-19 pandemic has complicated its execution. The purpose of this communication is to raise awareness of this complication, the calculations that must be performed on a case-by-case basis, and the three key factors to consider:
- 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 for claiming or referring the matter to the supervising judge
Law No. 2020-290 of March 23, 2020, concerning emergency measures to deal with the Covid-19 epidemic, notably established a state of health emergency and allowed the Government to adopt, by decree, emergency measures related to the Coronavirus-Covid-19 crisis.
In this context, an order no. 2020-306 of March 25, 2020 relating to the extension of deadlines that expired during the health emergency period and to the adaptation of procedures during this same period was notably adopted.
What common law provides regarding claims
The people involved in the claim action
Article 2276 of the French Civil Code establishes the principle that, in matters of movable property, physical possession of an item creates a presumption of ownership. This principle does not always reflect reality, as the user of an item may not be its owner. To establish this reality, owners of movable property left in the possession of a debtor undergoing insolvency proceedings must claim it. A claim for recovery is not mandatory for all owners; it only applies to owners of movable property whose contract of transfer to the debtor has not been registered.
The procedures for legal action
The procedures for implementing the claim
– The owner has a period of three months to make a claim from the publication of the opening judgment in the BODACC;
– He must submit a request for acknowledgment of claim by registered letter with acknowledgment of receipt to the competent body, which has one month to respond:
- This refers to the court-appointed administrator in safeguard and receivership proceedings
- In the absence of an administrator, the request is addressed to the debtor who must obtain the concurring opinion of the agent;
- This refers to the court-appointed liquidator in the liquidation proceedings.
The possible follow-up actions to the claim
– The competent body may acquiesce to the claim and thus recognize the property right of the third party who can oppose it to the collective procedure;
– The competent body may refuse to accept the claim or not respond.
In either case, the owner must file a claim with the supervising judge within one month of the expiry of the deadline given to the competent body to respond. This order may be appealed within 10 days of its notification.
What is stipulated in Ordinance No. 2020-306 of March 25, 2020
Article 2 of Ordinance 2020-306 stipulates that:
“Any act, appeal, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation under penalty of nullity, sanction, lapse, preclusion, prescription, unenforceability, inadmissibility, expiry, automatic withdrawal, application of a special regime, invalidity or forfeiture of any right whatsoever and which should have been carried out during the period mentioned in Article 1 shall be deemed to have been done in time if it was carried out within a period which may not exceed, from the end of this period, the legally prescribed period for taking any act, appeal, legal action, formality, within the limit of two months […]”
In practice:
This article applies, unless otherwise specified, to all deadlines that expired or will expire between March 12, 2020, and the expiration of a one-month period following 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., currently, June 24, 2020. (May 24, 2020 + 1 month = "legally protected period" )
Acts prescribed by law or regulation and which were to be carried out during this period may be carried out within two months after this period.
Application of the provisions to the action for recovery
– The three-month period during which the owner can reclaim the furniture, as provided for in Article L.624-9 of the Commercial Code, falls within the scope of Article 2 of Ordinance 2020306.
This is a fixed deadline which, if not respected, renders the owner's rights unenforceable against the bodies of the insolvency proceedings and the debtor's creditors
– The one-month period following the expiry of the response period within which the owner must refer the matter to the supervising judge, under penalty of forfeiture, as provided for in the second paragraph of Article R.624-13 of the Commercial Code, also falls within the scope of Ordinance 2020-306
– If this period expires between March 12, 2020 and the expiry of the “legally protected period”, the claim must be made before the expiry of the period of two months following the end of this period, that is to say within three months following the expiry of the state of health emergency.
– If it expired during the legally protected period, the one-month period provided for in the second paragraph of Article R.624-13, before the expiry of which the owner must, under penalty of forfeiture, refer the matter to the supervising judge, runs from the end of the legally protected period.
Concrete examples (taking into account the end date of the state of health emergency as May 24, 2020 at midnight)
Example #1:
Opening judgment published on February 1, 2020
The deadline for submitting a claim, which expired on April 30, 2020, has been 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
The deadline for filing a claim, which expired on June 20, 2020, has been extended to August 24, 2020 (same)
Example #3:
Opening judgment rendered on March 14, 2020, published on March 28, 2020
Deadline expiring on June 28, 2020, not extended
Example #4:
Opening judgment rendered on June 14, 2020, published on June 28, 2020
Deadline expiring on September 28, 2020, and not extended
Vigilance is required
A claim for recovery of property is subject to a complex chain of deadlines that the owner of movable property must meticulously respect. Otherwise, their ownership rights are unenforceable against the insolvency proceedings and the debtor's creditors. While Ordinance No. 2020-306 aims to extend deadlines that expired during the public health emergency and to adapt procedures during this same period, the owner must be particularly vigilant given the calculation methods for this extension and its limitations.
