The date of cessation of payments that can be relied on against an executive facing sanction proceedings is the one set by the opening judgment (jugement d'ouverture), or by a judgment postponing it. The commercial chamber abandons its earlier case law, which left the sanctions judge free to adopt a different date. The failure to declare the state of cessation of payments within the fifteen-day period is therefore assessed by reference to that date alone.
Key points
- The judge ruling on the executive's contribution to the insufficiency of assets (insuffisance d'actif) or on a personal sanction must adopt the date of cessation of payments set by the opening judgment.
- Only a postponement judgment can substitute another date for the one set by the opening judgment.
- Personal bankruptcy (faillite personnelle) may be imposed on an executive alleged to have failed to declare the state of cessation of payments within fifteen days.
- An executive can no longer be criticised for a delay in filing calculated from a date that the opening judgment did not adopt.
Which date of cessation of payments applies when sanctioning an executive?
A judge hearing a sanction claim must adopt the date of cessation of payments set by the opening judgment, or by a postponement judgment. The commercial chamber quashes the appeal decision which had adopted a different date in order to impose liability on an executive (Com., 15 April 2026, No. 24-13.960). The decision is handed down on the basis of Articles L. 624-3 and L. 625-5 of the Commercial Code of French Polynesia.
A tribunal mixte de commerce placed a company into compulsory liquidation (liquidation judiciaire) on 28 August 2017. The same judgment set the date of cessation of payments at 26 July 2017. On 7 May 2019, the liquidator applied for an order requiring the executive to contribute to the insufficiency of assets and for a personal bankruptcy order.
The court of appeal (CA Papeete, 11 January 2024, No. 22/00264) held that the company had been in a state of cessation of payments since 3 August 2015. It inferred from this both mismanagement and a failure to file the declaration within the statutory period. It ordered the executive to bear the entirety of the admitted liabilities and imposed a fifteen-year personal bankruptcy.
The commercial chamber censures that reasoning (free translation): the date of cessation of payments had been set at 26 July 2017 by the opening judgment, and the court of appeal had to assess the consequences of the failure to declare by reference to that date alone. The quashing extends to all provisions of the decision, and the case returns to the Papeete court of appeal, sitting with a different composition. The Cour de cassation (France's highest civil court) did not rule on the other complaints.
It therefore appears necessary henceforth to interpret the abovementioned provisions as meaning that the failure to declare the cessation of payments within the statutory period, capable of constituting mismanagement or of justifying a personal sanction, is assessed by reference to the sole date of cessation of payments set in the opening judgment or in a judgment postponing that date.
What the executive can raise against the liquidator
An executive can no longer be criticised for a delay in filing measured from a date that the opening judgment did not adopt. The point of reference becomes a single one: the date appearing in the opening judgment, or the date substituted by a postponement judgment. The fifteen-day period is assessed by reference to that date alone, and not to a date reconstructed by the sanctions judge.
To criticise the executive for an earlier delay, the date of cessation of payments must have been postponed by a judgment. Failing that, the judge cannot set an earlier date when examining the alleged fault. A discussion of the company's financial health before the date adopted therefore no longer suffices to establish the failure to declare.
The solution applies to both grounds pursued against the executive: the contribution to the insufficiency of assets and the personal sanction. In both cases, the failure to declare is measured only from the date set by the opening judgment or by a postponement judgment.
What this reversal of case law changes
The commercial chamber abandons the rule under which the sanctions judge was not bound by the date of cessation of payments set in the opening judgment. The decision recalls the position adopted until then, referring to a 1996 decision (Com., 11 June 1996, No. 94-14.844). It rules out maintaining that position in explicit terms: "That solution is, however, a source of legal uncertainty and lacks coherence".
The incoherence lay in the duality of dates that the former position allowed. One date served to determine the suspect period (période suspecte) and to rule on the nullity of transactions entered into during it. Another could serve to assess the executive's conduct, for the purposes of the contribution to the insufficiency of assets or of a personal sanction. The decision unifies the reference around the date set at the opening of the proceedings, or postponed by judgment.
The scope of the decision must be measured precisely. The decision interprets Articles L. 624-3 and L. 625-5 of the Commercial Code of French Polynesia, the substance of which it reproduces. The quashing does not settle the executive's position: the court to which the case is remitted will resume the assessment of the alleged facts. The Cour de cassation also held the criticism admissible, characterising it as a ground of appeal on a pure point of law, since it did not rest on factual considerations extraneous to the findings of the lower court judges.
What steps to take when facing sanction proceedings?
The date of cessation of payments set at the opening of the proceedings becomes the central element in the debate over any delay in filing. The first step is to reread the opening judgment in order to identify the date it adopts. The second is to check whether a postponement judgment has altered that date. The third is to compare that date with the date of the declaration actually filed or of the application made.
A liquidator relying on a delay in filing must make sure that the date adopted by the judge who opened the proceedings permits that criticism. Failing that, the claim shifts towards other acts of mismanagement, which require proof of a contribution to the insufficiency of assets. That proof is built on dated and documented facts, independent of the mere chronology of the declaration.
The checks to carry out on the date adopted
- Identify in the opening judgment the date of cessation of payments adopted, since it governs the assessment of any delay in filing.
- Check whether a postponement judgment exists, that being the only decision able to substitute another date for the opening date.
- Compare that date with the declaration actually filed, the fifteen-day period being assessed by reference to that date alone.
- Distinguish, among the facts alleged, what relates to the delay in filing and what relates to other acts of mismanagement that contributed to the insufficiency of assets.
Frequently Asked Questions
Can a liquidator rely on a date of cessation of payments earlier than the one in the opening judgment?
No, unless that date has been postponed by a judgment. Since the decision of 15 April 2026, any failure to declare alleged against an executive is assessed by reference only to the date set by the opening judgment or by a postponement judgment. A judge ruling on the contribution to the insufficiency of assets or on a personal sanction can therefore no longer freely adopt an earlier date. Absent postponement, the opening date prevails.
How long does an executive have to declare cessation of payments?
Fifteen days. Personal bankruptcy may be imposed on a person alleged to have failed to declare the state of cessation of payments within fifteen days. The decision of 15 April 2026, handed down on the provisions of the Commercial Code of French Polynesia, states that this allegation is assessed by reference only to the date of cessation of payments adopted by the opening judgment or by a postponement judgment.
Does the quashing put an end to the proceedings brought against the executive?
No. The quashing covers all provisions of the appeal decision, but the case is remitted to the Papeete court of appeal, sitting with a different composition. The executive may still be held liable after that fresh examination. Any delay in filing will, however, have to be assessed by reference to the date of 26 July 2017 adopted by the opening judgment.
Which documents help challenge a company's date of cessation of payments?
The discussion normally rests on the company's financial records: bank statements, trial balances, payment schedules, moratoria granted by creditors and reminder correspondence. These items make it possible to pinpoint when the company stopped meeting its commitments. An executive is well advised to keep such documents from the first cash-flow difficulties, since they then serve to challenge the date adopted and the existence of wrongful conduct.
Is an executive automatically liable for the debts of a liquidated company?
No. Compulsory liquidation does not, in itself, transfer the company's debts to the executive's personal assets. Liability normally requires mismanagement to be identified and proof that it contributed to the insufficiency of assets. The judge also assesses the share of the liabilities to be borne by the executive. Personal sanctions are subject to separate conditions, which must be established independently.