The sale of all or part of corporate assets is an important step of the judicial liquidation of a company as such sale is designed to ensure the survival of activities that are capable of being operated independently and save the associated jobs on the one hand, and to settle the company’s liabilities on the other hand.
Wherever the bankruptcy court considers that such a sale may be envisaged, it authorizes the continuation of the business activities and sets the deadline by which purchase offers must be filed.
To avoid fraudulent sales, Article L. 642-3 of the French Commercial Code prohibits the corporate officers of a company placed in judicial liquidation to file such an offer, either directly or through an intermediary.
In a decision dated March 8, 2017, the Cour de Cassation (French Supreme Court) provided for the first time a definition of the concept of “use of intermediary(ies)” within the meaning of the aforementioned Article.
The United Kingdom is the first Member of the European Union that used the withdrawal option provided for under Article 50 that was introduced in the Treaty on European Union by the Lisbon Treaty. This unexpected withdrawal raises major challenges that no one seems to have actually anticipated.
Countdown to Brexit started on March 29, 2017, date on which Theresa May officially notified the Chair of the European Council of the United Kingdom's intention to leave the EU. This notification launches two years of tough negotiations at the end of which the United Kingdom and the European Union must agree on the terms and conditions of UK’s withdrawal, unless this timeline is extended by unanimous agreement from all EU Member States.
The timetable for negotiations coincides with the entry into force in 2019 of a series of financial rules, one of the most important in the banking and financial sector being the Directive on markets in financial instruments, known as the MiFID Directive. The implementation of this Directive is essential to allow banks and investment firms to operate within the European Union.
Theresa May said that she is in favor of the preservation of expatriates’ rights provided that an agreement on “reciprocal rights” is reached.
In fact, it is highly likely that the British Government will impose work permit restrictions. In that case, and as the principle of reciprocity will apply, British citizens will need a visa to work in France.
The future of expatriates will most certainly be used as a bargaining chip during the withdrawal negotiations and chances are high that what happens to them will be decided at the last minute, in 2019, when UK’s withdrawal from the European Union will become effective.
Let us hope, at least, that our leaders will work out efficient agreements to impair as little as possible the free movement of people between the United Kingdom and France, in particular with respect to business immigration.
The Cour de Cassation (French Supreme Court) recently held that a price reduction clause contractually agreed upon between a supplier and its distributor can create a significant imbalance in the rights and obligations of the parties, within the meaning of Article L. 442-6 I §2 of the French Commercial Code.
The concept of “significant imbalance”, sometimes criticized for its vagueness, is addressed in a growing number of court decisions that provide a concrete illustration thereof through a factual analysis of behaviors and contractual provisions agreed upon between business partners.
The decision commented in this article is particularly noteworthy because it recalls that, as per the terms of the above-mentioned Article, the judge is empowered to check the price set by the parties.
In a decision dated January 31, 2017, the Commercial Chamber of the Cour de Cassation (French Supreme Court) held that “unless otherwise agreed upon between the parties, the first demand guarantee, that does not follow the guaranteed obligation, is not transferred in case of a split-up”.
This position has already triggered many comments and conflicting views. It deserves special attention given that, in particular, first demand guarantees are an essential issue for businesses and supposed to ensure legal certainty for their beneficiaries.
On February 23, 2016, the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (General Directorate for Competition, Consumer Protection and Frauds, hereinafter “DGCCRF”) released it 2016 activity report.
In this report, the DGCCRF – which monitors the proper operation of the markets to the benefit of consumers and businesses – highlights the salient facts of 2016 concerning inter alia the balance of business relationships, the fight against late payments and the fight against anti-competitive practices. It also provides a status report on its activity concerning the rules on economic protection of consumers and the fight against abusive practices.
Holding several corporate mandates is a common practice in corporate groups. In general, it is assuredly useful to ensure a coherent management of the various group entities, in line with the group’s global policy.
Yet, when the relevant corporate officer no longer fits the bill and when the group wishes to terminate him/her, the situation is all the more complex if he/she has varied and diversified duties/mandates within the group. Indeed, the termination of employment within the parent company for whatever reason does not necessarily entail the termination of the mandates held in subsidiaries. This principle was recently recalled in a decision handed down by the Court of Appeals of Paris.
Foreign parent companies whose French subsidiary is subject to insolvency/bankruptcy proceedings (judicial liquidation or receivership) can in certain instances be sued in tort by the employees of such subsidiary who have been dismissed. This type of claim in tort in the context of insolvency/bankruptcy proceedings is becoming an increasingly common practice in France.As such, French Labor Courts may order foreign parent companies to pay damages in compensation for the loss suffered by employees dismissed in France as a result of a fault/negligence by such parent companies in the management of their French subsidiary. However, a decision handed down by the Cour de Cassation (French Supreme Court) on January 10, 2017 specified that, in the context of international insolvency proceedings, the French judge has not necessarily jurisdiction to adjudicate this type of case.
Since January 1, 2017, spouses who agree on the breakdown of their marriage and on the effects of such breakdown may divorce, without a judge, by signing a private agreement that must be countersigned by their respective lawyer and then recorded and kept by a notary. What are the practical implications of this reform? Article authored in collaboration with Kheidi Bentamra, trainee-lawyer.
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