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Thesis

French

ID: <

10670/1.xpcavt

>

Where these data come from
Cessation of payments in the interprises fighting for survival

Abstract

Cessation of payments is certainly one of the key concepts in the law on collective insolvency proceedings. This can be seen by checking the litigation, which is very abundant in this matter. Legally defined in the first paragraph of Article L. 631-1 of the Commercial Code as the inability of a debtor to meet its accrued liabilities with its quick assets, this definition originated in a decision of the Court of Cassation issued on February 14, 1978. Under the provisions prior to the insolvency act, cessation of payments is a "cursor" which serves as a line of demarcation between amicable proceedings and judicial proceedings. Such a system has been criticized for being sorely lacking in flexibility and effectiveness in preventing business failures. The law of July 26, 2005, with the objective of anticipating treatment of company difficulties, put an end to the "cessation-cursor" by instituting the amicable conciliation proceeding and the collective insolvency proceeding. However, when the "barriers" formed by the anticipation tools have not been able to halt the risk of cessation of payments, the company director in such a situation must, within a period of forty-five days, request the initiation of a receivership or court-supervised liquidation proceeding. When either of these proceedings is initiated, the court must fix a date of cessation of payments. This date will be final for the determination of the suspect period. Moreover, the initiation of collective insolvency proceedings will have an effect on the enterprise fighting for survival, on the creditors whose ability to collect their debt is threatened, on the suppliers worried about their contractual relations with the debtor, on the guarantors who fear being called upon and on the debtor itself. Prior management of the enterprise will be probed and if faults more or less closely connected to the cessation of payments are revealed, sanctions or tort actions may result.

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