Declaration of Claims to the Judicial Trustee in French Insolvency Proceedings

A mandatory declaration for all creditors

When insolvency proceedings are opened, all creditors whose claim arose before the opening judgment must file a declaration of claim (“déclaration de créance“) with:

• the judicial representative (mandataire judiciaire) in safeguard proceedings (French Commercial Code, art. L. 622-24) and in judicial reorganisation (French Commercial Code, art. L. 631-14), or

• the liquidator in judicial liquidation (French Commercial Code, art. L. 641-3).

The declaration of claim does not guarantee payment. On the contrary, where a creditor holds no security or priority, it has virtually no chance of receiving payment even if the claim is duly declared. Nevertheless, the declaration remains a compulsory gateway: failing to declare means the creditor loses its practical ability to be paid within the proceedings (French Commercial Code, art. L. 622-26; for reorganisation and liquidation, see also arts. L. 631-14 and L. 641-3).

The declaration is, in practice, the only positive step required from the creditor. What follows (verification of claims, admission or rejection, ranking, distributions) largely escapes the creditor’s procedural control. For that reason, the debtor cannot invoke the ordinary rule of lapse of proceedings through inactivity (“the proceedings lapse when none of the parties takes steps for two years”: French Code of Civil Procedure, art. 386) against a creditor who has properly declared its claim, because the subsequent steps are not in the creditor’s hands (Commercial Chamber of the Cour de cassation, 8 January 2020, nos. 18-22606, 18-22607 and 18-22608).

Specific points

• Failure of a safeguard or reorganisation plan. If a plan is later terminated and liquidation is ordered, creditors covered by the plan do not have to declare again: claims recorded under the plan are admitted as of right, after deducting amounts already received (French Commercial Code, art. L. 626-27 III).

• Employees. Employees do not have to declare their claims (French Commercial Code, art. L. 622-24, para. 1).

• No written instrument. The claim must be declared even if it is not evidenced by a “title” or formal instrument (French Commercial Code, art. L. 622-24, para. 4).

• Surety / co-obligor. A surety or co-obligor who has partially paid before the opening judgment may declare a claim for what it paid on behalf of the debtor (French Commercial Code, art. L. 622-33, para. 2). Even before paying, the surety may declare to preserve its personal recourse; this right extends to persons who are co-obligors, have granted personal security, or have allocated/assigned an asset as security (French Commercial Code, art. L. 622-34).

• Security granted for another’s debt. Security interests granted as collateral for a third party’s debt must be declared (French Commercial Code, art. L. 622-25).

Special cases: claims arising after the opening judgment

A claim does not need to be declared if it arises:

• for the needs of the proceedings or of the observation period, or

• in consideration of a service provided to the debtor during that period

(French Commercial Code, art. L. 622-24).

In principle, such post-opening claims are payable as they fall due (French Commercial Code, art. L. 622-17-1). If they are not paid, they at least benefit from a preferential ranking compared with other claims (ranking rules are treated elsewhere in the scheme of the Commercial Code).

However, a post-opening claim must be declared if it is unrelated to the continuation of the debtor’s business, for example certain purely personal debts (e.g., rent under a residential lease of a trader placed into proceedings). By contrast, maintenance claims do not have to be declared (French Commercial Code, art. L. 622-24, last paragraph).

Example – Garagiste’s claim (post-opening “useful” claim). A garage owner does not have to declare a claim where it arose (i) after the opening of the customer’s insolvency proceedings and (ii) for the needs of the proceedings or in consideration of services supplied during the proceedings (Commercial Chamber of the Cour de cassation, 22 November 2023, no. 22-13299).

The two-month deadline

The time limit to declare is two months from publication of the opening judgment in the BODACC (French Commercial Code, arts. L. 622-26 and R. 622-24, para. 1).

Creditors who hold a registered security or who are bound to the debtor by a published contract must be personally notified of the opening of proceedings within 15 days of the judgment by registered letter with acknowledgement of receipt (French Commercial Code, art. R. 622-21, paras. 1 and 3). This notice is mandatory whenever the creditor has registered security, even if that security is later disputed (Commercial Chamber of the Cour de cassation, 6 December 2011, no. 10-24968).

For those notified creditors, the declaration deadline runs from the date they receive the notice (French Commercial Code, art. L. 622-24, para. 1). However, if they are notified before publication in the BODACC, they still have two months from BODACC publication to declare (Commercial Chamber of the Cour de cassation, 30 October 2012, no. 11-22836).

If a creditor entitled to notice does not receive it, the creditor should not be time-barred: only receipt of the notice triggers the two-month period whose expiry produces forfeiture (Commercial Chamber of the Cour de cassation, 27 February 2007, no. 06-12033).

Extensions

• Creditor outside metropolitan France (where proceedings opened in metropolitan France). The deadline is extended by two months for creditors who do not reside in metropolitan France (French Commercial Code, art. R. 622-24, para. 2).

• Proceedings opened overseas. If the court is located in an overseas department/collectivity, the deadline is extended by two months for creditors not residing there (French Commercial Code, art. R. 622-24, last paragraph).

• Ongoing contracts – additional one month. Contracting parties (including landlords) benefit from an additional one month from automatic termination or notification of the termination decision to declare the claim resulting from termination; credit institutions have the same additional month to declare termination indemnities and penalties relating to contracts continued after the opening judgment (French Commercial Code, art. R. 622-21, para. 2).

Case law highlights

• Defective notice: deadline does not run. Where the notice served by the representative was irregular (missing mandatory information under art. R. 622-21), the two-month period did not begin to run; the late declaration was therefore valid (Commercial Chamber of the Cour de cassation, 22 March 2017, no. 15-19317).

• Claim not yet due: still must be declared. A financial guarantee claim arising from a contract concluded before safeguard must be declared within two months of BODACC publication, regardless of whether the claim is already enforceable (Commercial Chamber of the Cour de cassation, 7 February 2024, no. 22-21052).

Drafting the declaration of claim

Content of the declaration

The declaration must state the amount due as of the opening judgment, indicate amounts falling due later and their due dates, and mention (French Commercial Code, arts. L. 622-25, para. 1 and R. 622-23):

• evidence establishing the existence and quantum if the claim does not arise from a formal title (or an evaluation if the amount is not yet fixed);

• the method of calculating interest not yet definitively quantified (this indication counts as a declaration for the amount later determined);

• the court seized if the claim is in dispute;

• the date and characteristics of any security: evidence of existence, nature, and scope if the security has not been registered.

Attachments. Supporting documents must be attached under a schedule; copies are sufficient. The representative may later request missing documents (French Commercial Code, art. R. 622-23, last paragraph).

Foreign currency. Conversion into euros is made at the exchange rate as of the opening judgment (French Commercial Code, art. L. 622-25, para. 2).

Certification. Unless the claim arises from an enforceable title (e.g., a final judgment), the declared claim must be certified as sincere by the creditor; the judge-commissioner may request the auditor’s or accountant’s endorsement (French Commercial Code, art. L. 622-25, last paragraph).

Minimalist presentation: courts focus on the creditor’s unequivocal intent

Courts assess whether the writing sent by the creditor expresses, without ambiguity, the creditor’s intention to claim payment.

• Sending instruments enabling identification of the creditor and quantification of the claim may be treated as a declaration (Commercial Chamber of the Cour de cassation, 15 February 2011, no. 10-12149).

• Declarations that are overly elliptical should not simply be rejected; the judge-commissioner must request the clarifications needed (Commercial Chamber of the Cour de cassation, 5 June 2012, no. 11-17603).

Claims not definitively quantified

Where the amount is not fixed, the claim must still be declared on the basis of an estimate (French Commercial Code, art. L. 622-24, para. 4).

Pitfalls

• “One euro, to be completed later”. If the creditor does not complete the declaration in time, only one euro will be admitted (Commercial Chamber of the Cour de cassation, 5 May 2015, no. 14-12381).

• “Plus interest”. The words “plus interest” are not enough. Either the declaration must set out the interest calculation method, or it must expressly refer to the instrument containing that method. Otherwise, interest accruing after the declaration is lost (Commercial Chamber of the Cour de cassation, 17 October 2018, no. 17-17268).

Model – Declaration of claim (template)

Who may sign the declaration?

The declaration may be made by the creditor or by any employee or agent chosen by the creditor.

For legal entities, the declaration may be made by:

• the legal representative, or

• an employee holding a delegation of authority that expressly includes power to file declarations of claim.

To reduce litigation over authority, the creditor may ratify a declaration made on its behalf up until the judge rules on admission (French Commercial Code, art. L. 622-24, para. 2). Ratification may be implicit, for example where the creditor later sues for admission of the claim (Commercial Chamber of the Cour de cassation, 10 March 2021, no. 19-22385; 29 September 2021, no. 20-12291).

Selected examples

• Declaration signed by a properly appointed representative is valid even if the appointment has not yet been registered with the RCS (Commercial Chamber of the Cour de cassation, 12 July 2004, no. 02-17255).

• General wording such as “the widest powers to bind the company” is insufficient: the delegation must expressly authorise court action or declarations of claim (Commercial Chamber of the Cour de cassation, 9 June 1998, no. 96-13675).

• Illegible signature with only “accounts department” is irregular where the signatory cannot be identified as the delegate (Commercial Chamber of the Cour de cassation, 17 June 1997, no. 95-12415; 29 April 2002, no. 99-16247). Proof of identity may be produced until the judge rules (Commercial Chamber of the Cour de cassation, 21 November 2006, no. 05-19298).

• A lawyer does not need to justify a special power to declare on behalf of the creditor (Commercial Chamber of the Cour de cassation, 3 June 1997, no. 95-10603), including where signed “by order” by an associate lawyer (Commercial Chamber of the Cour de cassation, 25 October 2011, no. 10-24658).

• A bailiff (commissaire de justice) must justify a written special power (Commercial Chamber of the Cour de cassation, 13 March 2007, no. 05-21649).

Where to send the declaration

The declaration must be sent:

• to the judicial representative in safeguard or reorganisation (French Commercial Code, art. L. 622-24, para. 1), or

• to the liquidator in liquidation (French Commercial Code, art. L. 641-3, para. 2).

No specific form is required. In theory, a simple letter is sufficient; in practice, the creditor must preserve evidence of dispatch and receipt, therefore the declaration should be sent by registered letter with acknowledgement of receipt.

Practical points

• Contact details are usually available from the company’s Kbis extract or from the court registry.

• A declaration addressed to the firm appointed as liquidator, but to another partner than the one named in the judgment, remains valid (Commercial Chamber of the Cour de cassation, 3 July 2024, no. 23-10067).

• A fax declaration is possible, but the transmission report is only a beginning of proof and must be supported by other evidence (Paris Court of Appeal, 15th Chamber, 2 April 2002, no. 2000-14556).

• A statutory electronic portal is planned (French Commercial Code, art. L. 814-2), but where not operational, registered letter remains the safe route.

Declaration filed by the debtor on behalf of the creditor

Where the debtor informs the judicial representative of a claim, the debtor is presumed to have acted on the creditor’s behalf unless and until the creditor files its own declaration (French Commercial Code, art. L. 622-24, para. 3). The debtor must transmit this information within two months of BODACC publication (French Commercial Code, art. R. 622-24, para. 1).

Case law

• If the debtor communicates only the creditor’s name without the amount, there is no valid declaration on the creditor’s behalf, even if the amount appears in the opening judgment (Commercial Chamber of the Cour de cassation, 5 September 2018, no. 17-18516).

• Where the debtor provides the creditor’s name and the amount, the list may constitute a declaration, even if it lacks certain details (e.g., interest calculation, security details) — the declaration is valid within the limits of the information provided (Commercial Chamber of the Cour de cassation, 8 February 2023, no. 21-19330).

• Debtor disclosure does not amount to admission of liability: the debtor may still later dispute the claim (Commercial Chamber of the Cour de cassation, 23 May 2024, no. 23-12134).

If the creditor misses the deadline

Sanction: exclusion from distributions

If the declaration is not filed within the statutory period, the creditor is not admitted to distributions and dividends unless forfeiture is lifted (French Commercial Code, art. L. 622-26; and, for reorganisation and liquidation, arts. L. 631-14 and L. 641-3).

Effect during a plan

Claims that are not declared in time are unenforceable against the debtor and the surety during performance of the plan, and after performance if plan commitments are fulfilled (French Commercial Code, art. L. 622-26 for safeguard; art. L. 631-14 for reorganisation). The same applies to undeclared security interests.

Creditor barred until the end of the proceedings (and no “anticipatory” suit). A creditor who failed to declare attempted to sue the debtor during execution of a plan to have its damages quantified, fearing limitation. The claim was rejected: (i) undeclared claims are unenforceable during the plan and after it if the plan is performed; (ii) the creditor had no interest in acting prematurely because limitation is suspended until the end of the collective proceedings. The creditor may act after that date if the plan is terminated (Commercial Chamber of the Cour de cassation, 9 September 2020, no. 19-10206).

Application to lift forfeiture before the judge-commissionner (“juge-commissaire“)

A creditor who missed the deadline may apply to the judge-commissioner for relief from forfeiture.

To succeed, the creditor must show:

• either that its failure was not attributable to it,

• or that the debtor omitted the creditor from the list of creditors,

• or that the creditor was entitled to personal notice (registered security / published contract) but did not receive it (French Commercial Code, art. L. 622-26; on notice, see art. R. 622-21).

Six-month time limit. The relief application must be brought within six months from BODACC publication of the opening judgment in safeguard proceedings; for creditors entitled to notice, the period runs from receipt of the notice (French Commercial Code, art. L. 622-26, para. 2).

Key cases

• If the debtor did not establish the list of creditors (or established an incomplete list), the omitted creditor may obtain relief even without proving any causal link between the omission and the late declaration (Commercial Chamber of the Cour de cassation, 16 June 2021, no. 19-17186). Relief is granted as of right, even if the debtor disputes the claim (Commercial Chamber of the Cour de cassation, 3 July 2024, no. 23-15715).

• A creditor whose claim was understated by the debtor may seek relief, but must still prove that its failure was not attributable to it (Commercial Chamber of the Cour de cassation, 27 March 2024, no. 22-21016).

• The relief application can be sent to the registry on the last day by registered letter (Commercial Chamber of the Cour de cassation, 28 January 2014, no. 12-27728).

• Costs are borne by the defaulting creditor, but may be shifted to the debtor where the debtor’s omission caused the issue (French Commercial Code, art. R. 622-25).

Model – Application for relief from forfeiture (template)

Decision of the judge-commissioner

If relief is granted, the creditor must declare the claim within one month of the decision granting relief (French Commercial Code, art. L. 622-24). The creditor may participate only in distributions made after the application for relief (French Commercial Code, art. L. 622-26, para. 1).

If relief is refused, the creditor may appeal to the Commercial Court and then to the Court of Appeal regardless of the amount of the claim (Commercial Chamber of the Cour de cassation, 12 January 2016, no. 14-18936).