Background
Etudes et développement immobiliers (Edim) and Société Générale were parties to a framework agreement assigning business receivables as security. After an animal-protection association refused to pay Edim’s €462,983.56 construction invoice, which had been assigned to the bank, Société Générale sued Edim and the association for payment.
Following Edim’s placement into judicial reorganization in 2009, Société Générale filed a €593,132.16 claim representing the debit balance of Edim’s account, including the assigned invoice. A final judgment in 2011 fixed €462,983.56 of the bank’s claim, and in 2013 the judge-commissioner recorded that the declared claim was the subject of pending litigation. Société Générale nevertheless sought definitive admission of the full claim in 2018 and later assigned it to FCT Cedrus. The Aix-en-Provence Court of Appeal admitted an additional €130,148.60 as an unsecured claim.
The Court’s Holding
The Court of Cassation held that an order by the judge-commissioner recording pending litigation—even if that determination was erroneous—divests the judge-commissioner of authority over the claim and makes any new application concerning the same claim inadmissible. The 2013 order covered the entirety of Société Générale’s declared claim, so the insolvency court lacked power to admit any part of it through the later application.
The Court therefore partially quashed the appellate judgment without remand and decided the issue itself. It declared the December 12, 2018 claim-admission application inadmissible, while leaving intact the appellate rulings on the plan supervisor’s dismissal request, the admissibility of FCT Cedrus’s appeal, and the reversal of the judge-commissioner’s May 14, 2020 order. FCT Cedrus was ordered to pay costs and €3,000 to Edim.
Key Takeaways
- A judge-commissioner’s order recording pending litigation removes the claim from the insolvency court’s claim-verification authority, even if the order was mistaken.
- The resulting loss of authority applies to the entire claim identified in the order and prevents even partial admission through a renewed application.
- A creditor or assignee cannot cure the problem by filing a new claim-admission request before the judge-commissioner.
Why It Matters
The ruling gives strong procedural finality to orders finding that litigation is already pending. Creditors in French insolvency proceedings must challenge or pursue the consequences of such an order through the appropriate procedural route rather than return to the judge-commissioner for admission of the same claim.
For assignees of distressed debt, the decision underscores that acquiring a claim does not eliminate procedural limitations already attached to it.