Failure to declare insolvency may be sanctioned by a ban on management, even if the manager had not realized that he was in a state of insolvency.
Cas. Com., January 12, 2022, n°20-21.427
Pursuant to Article L. 653-8, paragraph 3, of the Commercial Code , the court may order a management ban against the corporate officer "who has knowingly omitted to request the opening of reorganization or judicial liquidation within the period of forty-five days from the cessation of payments, without having, moreover, requested the opening of a conciliation procedure.
In this case, on declaration of cessation of payments by its manager, Mr. X, a receivership procedure had been opened against SARL Y… by judgment of April 6, 2016, setting the date of cessation of payments January 1 , 2016. By judgment of May 11, 2016, the court had ended the observation period and ordered the company to be liquidated. Then, at the request of the liquidator, the court had postponed the date of cessation of payments to October 6, 2014 by judgment of February 5, 2018.
The liquidator then having had the manager summoned before the commercial court for the purpose of a management ban, the court pronounced, on September 30, 2019, a seven-year ban on management against MX
The Court of Appeal confirmed in all its provisions the judgment rendered by the Commercial Court. According to the trial judges, while it cannot be considered as established that Mr. X was aware of the state of cessation of payments as of October 6, 2014, the fact remains that it is established that he could only know, from the first half of 2015, that the company was not in a position to meet its current liabilities with its available assets (non-payment of the employer's share of social security contributions; absence of payment of VAT then salaries for a period of four months).
The court further underlines that the prohibition to manage for a period of seven years – a measure which is not the most important among those that can be pronounced – is an appropriate and perfectly proportionate measure in view of the seriousness of the faults committed. by Mr. X…
Mr. X...brought the dispute before the Court of Cassation, arguing that the manager who was not aware of the state of cessation of payments, within the period of forty-five days from the date of this ci, cannot be charged for the delay, whatever it may be, with which he made the declaration after this period.
The High Court dismisses the appeal considering that the Court of Appeal was able to deduce that while waiting March 23, 2016 to request the opening of collective proceedings, Mr. X had knowingly omitted to declare the cessation of payments in the period of forty-five days provided for in Article L. 653-8, paragraph 3, of the Commercial Code .
Vigilance is therefore required for managers facing financial difficulties.
