Personal Bankruptcy & Prohibition on Managing / Settlement

While a settlement may put an end to the action for payment of the insufficiency of assets, this judgment of the Cour de cassation specifies that it cannot have as its object to defeat — in return for the payment of a certain sum or the waiver of a claim — the actions seeking the imposition of a professional sanction, since personal bankruptcy and the other prohibition measures under Articles L.653-1 et seq. of the Commercial Code are not aimed at protecting the collective interest of creditors but at protecting the general interest through measures that are both preventive and punitive in nature. 📍Accordingly, no settlement may be reached in respect of personal-bankruptcy and prohibition-on-managing measures, which fall within economic public policy and go well beyond the mere interest of the creditors of the insolvency proceedings. 📚 For further reading, see the very thorough article on this subject by Public Prosecutor Christophe Delattre (LEXISNEXIS SA – LA SEMAINE JURIDIQUE – ENTREPRISE ET AFFAIRES – No. 21 – 23 MAY 2019)

-> Judgment no. 747 of 9 December 2020 (19-17.258) – Cour de cassation