Background
Korbey d’Or was placed in judicial liquidation on August 31, 2022, with authorization to continue operations for purposes of an asset sale plan. On March 29, 2023, the trial court extended that liquidation proceeding to Sylver Asset Management (SYGMA), a separate entity. Two days later, on March 31, 2023, the court approved Korbey d’Or’s asset sale plan. SYGMA appealed the extension judgment.
The Court of Appeal of Saint-Denis issued two rulings—one on September 18, 2024 and another on April 30, 2025. The liquidator then appealed to the Court of Cassation, arguing both procedural errors regarding closure of oral arguments and substantive errors concerning the admissibility of the extension action.
The Court’s Holding
The Court of Cassation rejected the liquidator’s appeal on all grounds. Regarding the first procedural issue, the court held that the appellate court correctly refused to revoke the closure order. Because the appellate court had reopened oral arguments under Article 905 of the Civil Procedure Code—a streamlined procedure that does not require full briefing and case management—it properly limited the parties’ observations to the question it had raised on its own motion and was under no obligation to revoke the prior closure order.
On the substantive issue, the Court of Cassation held that under Articles L. 621-2 and L. 642-1 of the Commercial Code, adoption of an asset sale plan—whether total or partial—constitutes a legal bar to extending judicial liquidation proceedings to third parties. Because Korbey d’Or’s asset sale plan had been irrevocably approved by judgment on March 31, 2023, the liquidation could not be extended to SYGMA. The appellate court therefore correctly affirmed the trial court’s extension judgment and properly declared the extension action inadmissible on the date the appellate court ruled.
Key Takeaways
- Once an asset sale plan in judicial liquidation is formally adopted, the liquidation proceeding cannot be extended to affiliated or related entities, even if the extension was sought before the plan’s approval.
- The legal bar to extending liquidation arises from the asset sale plan itself, regardless of the chronological order of judgments; what matters is the irrevocable adoption of the plan as of the date the appellate court decides.
- Courts applying the streamlined procedure under Article 905 of the Civil Procedure Code (circuit court procedure) are not required to revoke closure orders and may limit parties’ submissions to issues the court has raised on its own motion.
Why It Matters
This decision clarifies the interaction between asset sale procedures and extension of insolvency proceedings under French commercial law. For liquidators and creditors, it establishes that once management approves a plan to sell a debtor’s assets, they lose the ability to extend the liquidation to affiliated entities as a strategy to preserve or recover assets. This rule creates a sharp procedural point: the liquidation extension must be sought and decided before the asset sale plan becomes final.
The ruling reflects a policy choice that asset sale plans provide finality and protection for purchasers and stakeholders. It also reinforces the limited scope of streamlined appellate procedures, which prioritize efficiency by foreclosing broad reopening of closed issues. For practitioners, the decision underscores the importance of timing extension petitions before asset plans are approved.