When a company is subject to safeguard, receivership, or liquidation proceedings, its creditors must file their claims within a strict deadline. Failure to do so may result in them being unable to participate in the distributions and dividends of the insolvency proceedings.

A creditor who has not filed a claim on time may, however, request relief from forfeiture from the supervising judge . This request may be based, in particular, on the creditor's omission from the list submitted by the debtor to the court-appointed administrator.

The Court of Cassation has progressively strengthened the protection of the omitted creditor: the latter does not have to prove that the debtor's omission caused the late filing. More recently, it clarified that the debtor must mention the creditor even if they dispute the existence or amount of the debt.

What is the deadline for filing a claim?

From the date of publication of the opening judgment in the Official Bulletin of Civil and Commercial Announcements – BODACC, creditors have, in principle, a period of two months to declare their claims to the judicial representative or the liquidator.

This time limit is set out inArticle R. 622-24 of the French Commercial Code. It is extended by two months when the proceedings are opened in metropolitan France and the creditor is not resident there. An equivalent rule applies when proceedings are opened in an overseas department or territory and the creditor is not resident there.

Creditors can consult announcements relating to the opening of collective procedures on the BODACC website and check the situation of a company on theBusiness Directory.

Certain categories of creditors benefit from specific rules. Pursuant to ArticleL. 622-24 of the French Commercial Code, creditors holding a registered security interest or bound to the debtor by a registered contract must be personally notified. For them, the deadline for filing a claim begins upon notification of this warning.

The court-appointed administrator must also notify known creditors under the conditions set out in ArticleR. 622-21 of the Commercial Code.

The declaration must be made even when the claim:

• is not yet evidenced by a title;
• is possible or conditional;
• is being contested;
• or is not yet definitively quantified.

When the amount of the claim is not definitively fixed, it must be declared based on an estimate. The required information and supporting documents are specified in the regulatory section of the Commercial Code dedicated to the declaration of claims.

For a more general presentation of this mechanism, you can also consult our article on the declaration of claim and the precautions to be taken.

What are the consequences of a late declaration?

A creditor who does not declare their claim within the applicable time limit is barred from doing so.

According to ArticleL. 622-26 of the Commercial Code, he cannot then participate in distributions and dividends, unless he obtains a release from forfeiture from the supervising judge.

Claims and securities that have not been properly filed are also unenforceable against the debtor during the execution of the plan and, provided the commitments stipulated therein have been fulfilled, after the plan's completion. Subject to the conditions set forth in the legislation, this unenforceability also applies to individuals who are jointly liable or who have provided a personal or real security interest.

An undeclared debt is therefore not necessarily extinguished. In practice, however, the failure to declare a debt can prevent the creditor from obtaining payment within the framework of insolvency proceedings and can permanently jeopardize its recovery.

This difficulty is part of the broader system of freezing pre-existing debts and their collective processing. Our article on the judicial reorganization process helps to situate the declaration of claim within the various stages of the procedure.

Under what circumstances can a creditor be relieved of forfeiture?

ArticleL. 622-26 of the Commercial Code provides for two distinct bases.

The creditor can obtain relief from forfeiture if they establish:

• either that his failure is not due to his own actions;
• either that it results from its omission by the debtor when establishing the list of creditors provided for inArticle L. 622-6 of the Commercial Code.

In the first scenario, it is up to the creditor to demonstrate that a circumstance beyond their control explains their inability to declare their claim within the applicable time limit.

In the second scenario, case law is now particularly protective of the creditor who has not been included on the list established by the debtor.

What list must the debtor provide to the court-appointed administrator?

From the moment the procedure is initiated, the debtor must provide the court-appointed administrator with a list of his creditors.

ArticleR. 622-5 of the Commercial Code specifies the information that this list must contain, in particular:

• the name or designation of each creditor;
• its headquarters or its home;
• the amount of sums due on the day of the opening judgment;
• the amounts due and their due dates;
• the nature of the debt;
• the securities and privileges that accompany it;
• as well as the subject matter of the main contracts currently in progress.

This list plays an essential role. Pursuant to ArticleL. 622-24 of the Commercial Code, when the debtor brings a claim to the attention of the judicial representative, he is presumed to have acted on behalf of the creditor until the latter has himself sent his declaration.

The mention of the debt by the debtor can therefore be considered a declaration on behalf of the creditor, but only within the limits of the information actually transmitted to the judicial representative.

Must the omitted creditor demonstrate a link between the omission and the delay?

No.

In a judgment of June 16, 2021, No. 19-17.186, the commercial chamber of the Court of Cassation held that the omitted creditor did not have to establish that this omission was the cause of the lateness of his declaration.

In this case, the debtor had not provided the court-appointed administrator with any list of creditors. The Court of Cassation held that the complete failure to provide the list had the same legal effect as the omission of a creditor from a list that had actually been drawn up.

The solution is therefore applicable in two situations:

• the debtor did not submit any list of his creditors;
• A list was submitted, but the creditor in question is not on it.

In both cases, the creditor does not have to demonstrate the existence of a causal link between the debtor's breach and the failure to file a declaration within the legal time limit.

This solution is explained in particular by the reform resulting from theordinance of March 12, 2014, concerning the reform of the prevention of business difficulties and collective procedures. This ordinance eliminated the requirement that the omission be intentional.

It is therefore no longer necessary to demonstrate an intent on the part of the debtor to conceal the existence of the creditor. For a more general overview of the applicable law, please refer to our presentation on the reform of insolvency proceedings.

Is it necessary for the debtor to mention a claim that he disputes?

Yes.

The Court of Cassation provided an important clarification in a judgment of July 3, 2024, No. 23-15.715.

In this case, the debtor argued that he was not required to include on his list a debt whose existence he disputed. The Court of Cassation rejected this argument.

Reporting a claim to the court-appointed administrator does not constitute an admission of its validity. The debtor therefore retains the right to contest it later as part of the claims verification process.

However, he must mention the creditor on the list, even if he believes he owes him nothing.

The Court of Cassation infers that the creditor's omission entitles them to relief from forfeiture. In this case, relief is automatic: once the omission is established, the supervising judge does not have to assess the reasons why the creditor did not file their claim within the prescribed time limit.

The inclusion of a claim on the list and its admission to the liabilities are, however, two separate matters. The claim can then be discussed as part of the liability verification procedure.

What happens if the debtor completes their list late?

The situation is more nuanced when the debtor did not mention the creditor in his initial list, but then brings his claim to the attention of the judicial representative before the expiry of the declaration period.

The Court of Cassation examined this situation in a judgment of March 27, 2024, No. 22-21.016.

She points out that, when the debtor brings a claim to the attention of the judicial representative, he is presumed to have acted on behalf of the creditor until the latter has himself made his declaration.

Thus, when the debt has finally been reported by the debtor before the expiry of the declaration period, the creditor cannot necessarily invoke the initial omission to obtain a relief from forfeiture by operation of law.

If he considers that the amount transmitted by the debtor is less than the amount actually owed and wishes to declare a supplement, he must establish that the failure to declare this supplementary amount is not due to his own fault.

It is therefore necessary to distinguish between three situations:

• the total absence of mention of the creditor, which gives rise to the right to relief from foreclosure;
• the transmission of the claim by the debtor within the legal time limit, even after the submission of the initial list;
• the mention of a claim for an insufficient amount, which may require the creditor to demonstrate that their failure is not due to their own actions.

What is the deadline for requesting a statement of foreclosure?

The application must, in principle, be submitted within six months of the publication of the opening judgment in the BODACC.

For creditors holding a registered security interest or linked to the debtor by a registered contract, this period runs from the receipt of the personal notice that must be sent to them.

A special rule applies when the creditor was unable to know of the debtor's obligation before the six-month period expired. In this case, the period begins to run from the date on which it is established that the creditor could no longer have been unaware of the existence of the debt.

These rules are set out in the second and third paragraphs of ArticleL. 622-26 of the Commercial Code.

The application is submitted to the supervising judge of the insolvency proceedings. It must be accompanied by evidence demonstrating:

• the existence of the debt;
• his date of birth;
• the opening of the collective procedure;
• the expiry date of the declaration period;
• the omission of the creditor from the debtor's list;
• or, depending on the basis adopted, the circumstances demonstrating that the creditor's default is not attributable to him.

The costs of the proceedings are, in principle, borne by the defaulting creditor. However, the judge may decide to charge them to the debtor if the latter has not included the debt on their list of claims or has not properly brought it to the attention of the court-appointed administrator. This rule stems from ArticleR. 622-25 of the French Commercial Code.

What should the creditor do after obtaining the release from foreclosure?

Obtaining a release from forfeiture does not, in itself, constitute admission of the claim to the liabilities.

The creditor must still file their claim. In accordance with ArticleL. 622-24 of the Commercial Code, the new time limit runs from the date of notification of the decision relieving the creditor of the forfeiture and is reduced by half.

The creditor must therefore, in principle, make his declaration within one month of notification of the decision, subject to any specific rules that may apply to him.

The claim will then be subject to the verification procedure and may be:

• admitted in full;
• partially admitted;
• rejected;
• or be subject to a dispute falling under another jurisdiction.

The observation period of the judicial reorganization constitutes, in particular, the framework in which the situation of the company and the possibilities of settling its liabilities are examined.

Does the release from foreclosure guarantee payment of the debt?

No.

The relief from forfeiture allows the creditor to file their claim despite the expiration of the initial deadline. However, it does not prejudge:

• nor of the existence of the debt;
• nor its amount;
• nor of his rank;
• nor its admission to the liabilities;
• nor the funds that will actually be available for its settlement.

ArticleL. 622-26 of the Commercial Code further specifies that a creditor relieved of forfeiture can only participate in distributions subsequent to his request.

The prospects for payment therefore depend on the nature of the procedure, the existence of a plan, the priority of the claim, any security interests, and the value of available assets. In judicial liquidation, these issues are directly linked to the realization of assets and the distribution of proceeds.

What are the key takeaways?

The relief from foreclosure allows a creditor to remedy, under certain conditions, a late declaration of claim.

When a creditor has been omitted from the list drawn up by the debtor, they do not have to prove that this omission is the cause of their delay. The complete failure to provide the list has the same effect.

The debtor cannot justify the omission by the fact that he disputes the debt: registering it on the list does not constitute recognition of its validity.

This situation must be distinguished from one in which the debtor ultimately brought the claim to the attention of the court-appointed administrator before the filing deadline. In this latter case, the lifting of the forfeiture is not necessarily automatic, particularly when the creditor wishes to declare an additional amount.

The deadlines remain particularly strict. As soon as insolvency proceedings are opened against a debtor, the creditor must:

• search for the publication of the judgment in the BODACC ;
• identify the appointed judicial representative or liquidator;
• to check if his claim has been brought to his attention;
• declare the entirety of its claim without delay;
• and, if the deadline is exceeded, immediately examine the conditions for a lifting of the forfeiture.

ARST Avocats' Insolvency and Restructuring department assists companies, executives, creditors, and buyers in safeguard, receivership, and liquidation proceedings. The firm also handles debt disputes and, more generally, business litigation .

To go further

You can also find our dedicated publications on:

• to the various procedures for dealing with business difficulties ;
• to the progress of the judicial reorganization ;
• during the observation period ;
• to the verification of liabilities in receivership ;
• to the takeover of a company in difficulty ;
• and the consequences of suspending judicial liquidation proceedings.