Review
Jean Petreschi
Lawyer · M&A
The warranty against eviction owed by the seller of corporate securities is limited in time.
▶ Legislation. Under Articles 1626 and 1628 of the Civil Code, the seller of corporate securities is required to warrant the purchaser against any eviction, including an implied prohibition on competition. That prohibition must be proportionate and tailored to the activity and market concerned.
▶ The facts. Following the sale of a software-publishing company, a competing company was created by one of the sellers more than three years after the sale, and a competing piece of software was launched almost five years afterwards.
▶ The decision. The Cour de cassation (6 November 2024, no. 23-11.008) held that these facts did not breach the warranty against eviction. In an innovative market, a prolonged prohibition would have been disproportionate and contrary to the freedom to conduct business.
Notification by the tax authorities of a proposed reassessment to a company after its liquidation
▶ Legislation. After the closing of a company's liquidation and its removal from the Trade and Companies Register (RCS), only the appointment of an ad hoc agent by a court allows the company to be represented (Article 1844-8 of the Civil Code).
▶ The facts. The tax authorities notified a proposed reassessment to the liquidator of an SCI (non-trading real estate company) after its removal from the RCS, without requesting the appointment of an ad hoc agent.
▶ The decision. The Conseil d'État (19 July 2024, no. 488164) held that this notification was irregular, recalling that only a formally established representation makes it possible to validate such a post-liquidation procedure.
Publication of a decree on companies of insolvency administrators and judicial agents
Decree 2024-1021 of 13 November 2024 adapts the rules governing companies of insolvency administrators and judicial agents (administrateurs and mandataires judiciaires) pursuant to Order 2023-77.
▶ Compliance deadline: Companies must comply with the new rules before 16 November 2025 (subject to exceptions).
▶ Information obligations: SELs and SPFPLs must inform their professional authority before 1 March each year of the changes that occurred during the previous year.
▶ Purpose of SPFPLs: SPFPLs may hold interests in commercial companies under certain conditions.
▶ Compliance of the corporate purpose: If an SPFPL no longer complies with its corporate purpose, it has one year to bring itself into compliance.
▶ Transfer of shares in a SELARL: Approval of a transfer of shares to a third party is given by a majority of the partners representing the majority of the shares, unless the articles of association provide otherwise.
A bank cannot ignore the judicial liquidation of the general partner to whom it lent funds
▶ Legislation. The partners of a general partnership (SNC) are traders (Article L221-1 of the Commercial Code) and must be registered with the RCS. Judicial liquidation is recorded with the court registry or on Infogreffe (Article R 621-8, paragraph 3).
▶ The facts. A bank lent €19m to a partner of an SNC in judicial liquidation without checking his situation. The liquidator criticises the bank for failing to consult the court registry.
▶ The decision. The Cour de cassation (23 October 2024, no. 23-12.638) considers that the bank should have checked the partner's situation through Infogreffe. Its negligence is established, as it ought to have been aware of the judicial liquidation.
Where a property sale is rescinded, the seller does not have to reimburse the transfer duties
▶ Legislation. Transfer duties are refundable only by the tax authorities where the rescission of the sale is ordered by a judgment that has become res judicata (Article 1961, paragraph 2 of the General Tax Code).
▶ The facts. After the rescission of a property sale for latent defects, a court of appeal ordered the seller to reimburse the purchaser for the sale price as well as the transfer duties.
▶ The decision. The Cour de cassation (23 November 2024, no. 23-16.717) overturned that decision, holding that only the tax authorities may reimburse the transfer duties, and not the seller.
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