The judicial liquidation proceedings is intended to put end of the activity of a company or convert the debtor's patrimony into money through a global or separate assignment of his rights and assets.
Judicial liquidation follows the impossibility of placing a company in cease of payment in receivership. It can also intervene in the event of a failure of the recovery plan.
Judicial liquidation may concern any natural or legal person who exercises an agricultural, commercial, craft, professional and independent activity. We are going to dissect the different stages of a judicial liquidation procedure.
The opening request
The entrepreneur must proceed to the bankruptcy with the commercial court. This bankruptcy filing must contain a certain number of documents, such as the declaration of cessation of payments, the status of the workforce, a registration extract from the trade and companies register, the statement of assets. available and current liabilities, a cash position of less than a month, all the documents related to the company's accounts (annual accounts for the last financial year) and finally an exhaustive inventory of the company's assets, etc.
The manager of the company is therefore subject to the decisions of several bodies: the liquidator or judicial liquidator (who defends the interests of creditors), the judge-commissioner, the employee representative and the auctioneer, in the case of a sale. asset auctions.
Judicial liquidation, unless it has been the subject of a simplified procedure, can last 3 years. We therefore distinguish the judicial liquidation proceedings simplified with the common law liquidation.
The simplified judicial liquidation procedure
The court may decide to open a simplified liquidation procedure as long as certain conditions are met. The workforce must not exceed five employees and the turnover excluding tax is less than 750,000 euros. In this case, the procedure must be terminated within one year at the latest.
During judicial liquidation
First, the liquidator agent gets a full list of creditors. He informs them of the company's situation and indicates to them the deadline after which they must declare their debts as a liability of the liquidation.
During this judicial liquidation proceedings, the role of legal representative is to recover a maximum of assets among which appear the unpaid debts, to sell all the goodwill and assets forming part of the liquidation.
The agent is obliged, by settling the liabilities, to follow a strict order of creditors. Thus it is the employees who must be paid first, then comes the agent, then the tax authorities and URSSAF, and finally the creditors without special privilege, that is to say the suppliers. Thus, suppliers are paid only if there are still assets left. This payment is then made according to a distribution proportional to their claim.
The end of the procedure
The closure of the liquidation is declared when the liabilities have been discharged. It may be that at the end of the judicial liquidation procedure, the agent asks for sanctions against the entrepreneur. He may be criticized for his behavior during the procedure, management errors or poor bookkeeping. The manager can then be sanctioned by a management ban, a personal bankruptcy or a lawsuit in the context of a civil action.
As we can see, the consequences of judicial liquidation proceedings can therefore be burdensome for the entrepreneur. He may even have to pay personally for the consequences of poor management.
