Can a debtor who declares a creditor’s claim in the collective proceedings subsequently contest it?

In a recent decision dated 23 May 2024 (Com, 23 May 2024, no. 23-12.133), the Commercial Chamber of the Cour de cassation (French Supreme Court) indicated whether a debtor’s ‘declaration of claim’ constitutes recognition of the claim by its author. This is an interesting issue in insolvency law and in terms of verifying the liabilities of a company in difficulty, should the declarant wish to contest the validity of its debt at a later date.  

• Legal context

When collective proceedings are opened, the debtor must submit a list of its creditors to the trustee within eight days. This is provided for in article R.622-5 of the French Commercial Code. The trustee will then inform the creditors of this list, who have thirty days in which to contest it. Creditors who fail to respond within this period will lose their right to contest the proposals made by the trustee (rare exceptions allow them to seek the judge’s authorisation to be relieved of their right to contest).  

• The Court of Cassation ruling

In two judgments handed down on 23 May 2024, debtor companies contested a claim declared by a creditor, even though they themselves had brought this claim to the attention of the trustee. The creditor then argued that the list of claims drawn up by the debtor constituted recognition of the debt by the debtor and that even if the debtor companies did not recognise the amount declared by the creditor, they at least recognised the validity of the existence of the claim, since they had themselves declared it to the insolvency proceedings. The Court of Cassation then established the principle that a claim declaration made by the debtor on behalf of the creditor does not constitute recognition of the validity of the claim. The debtor is obliged to mention all claims that may be asserted by third parties, even if these are uncertain. In addition, in accordance with Article L.622-24 of the French Commercial Code, a debtor who has brought a third party’s claim to the attention of the Mandataire judiciaire is presumed to have acted on behalf of the creditor until such time as the creditor has submitted a statement of claims. According to the Cour de cassation, the recognition of these claims cannot be the responsibility of the debtor in difficulty.  

• Practical implications

This principle has a fundamental consequence for debtors and creditors in collective proceedings. If the debtor’s declaration of a claim for a creditor in the collective proceedings does not constitute recognition of its validity, the debtor will be able to contest it. As a result, it is now in the interests of the debtor in difficulty to declare all certain and uncertain claims, as he will then be able to contest them. In addition, the debtor will avoid the potential penalty of article L.653-8 of the French Commercial Code, which provides, in particular, that the debtor may be banned from running a business if he or she has not provided the information required to be provided to the judicial representative in bad faith.  

• Can a debtor who declares a claim by a third party to the collective proceedings subsequently contest it?

This decision of 23 May 2024 is important for all parties to the collective proceedings. The Court of Cassation considers that the list of claims submitted by the debtor to the judicial representative does not constitute recognition of the validity of the claims declared. This principle therefore gives the debtor the possibility of contesting these claims. It is therefore in the debtor’s best interests to declare all the claims likely to be asserted against him in a calm manner. Above all, it is in the interest of creditors not to rely on this declaration made spontaneously by the debtor and to send their declaration of claims and supporting documents to the judicial representative.