Cour de cassation, Commercial Chamber, July 2, 2025, No. 24-13.438
Preliminary reminder: the fate of security interests attached to a pre-commencement claim
Where a creditor holds a prior claim secured by a regularly published security interest prior to the judgment opening a collective procedure, it retains the benefit of this security interest during the procedure.
The intangibility of the claim and its accessories is thus preserved, justifying the possibility for the creditor to renew his security before it expires.
In the absence of timely renewal, the creditor loses his preferential right and can only be admitted to the liabilities on an unsecured basis (Cour de cassation, Chambre commerciale, February 17, 2021, no. 19-20.738).
In practice, this renewal is necessary until the consignment is effective within the meaning of the Civil Code. As long as this legal effect has not come into play, the creditor must maintain the effectiveness of his registration.
Case background
In this case, a bank had granted a secured loan to a debtor. Following the opening of a procedure de sauvegarde and the adoption of a plan, the bank allowed its initial mortgage registration to expire, then proceeded to register a new provisional judicial mortgage, while the plan was still being implemented.
The debtor and the court-appointed trustee then applied to have the registration cancelled, claiming a breach of article L. 622-30 of the French Commercial Code, which sets out the rule that the registration of security interests must be discontinued, prohibiting prior creditors from registering such security interests after the judgment opening the collective proceedings.
The contribution of the decision handed down by the Cour de cassation :
The Court of Cassation upheld the decision of the Court of Appeal, insofar as it ordered the release of the judicial mortgage registered during the execution of the safeguard plan, considering that article L. 622-30 of the French Commercial Code remained applicable to previous creditors, even after the adoption of the plan.
As a result, the registration made is deemed irregular, and its release may be ordered by the enforcement judge, in accordance with article R. 512-2 of the French Code of Civil Enforcement Procedures.
Contribution of the judgment :
Contrary to what is suggested by the position of article L. 622-30 of the Commercial Code within the said code, located in the chapter “of the business during the observation period“, the prohibition on the registration of security interests does not cease to apply after the adoption of the plan.
The Court thus confirms that any new registration of a security or conservatory measure remains prohibited while the safeguard plan is in progress, and that any initiative to the contrary is liable to be discharged.
Practical consequences :
The Court of Cassation held that the registration of a security interest after the opening judgment did not invalidate it, but rather rendered it unenforceable against the collective proceedings (Cour de cassation, Chambre commerciale, November 7, 2006, no. 05-11.551).
However, the previous creditor was still able to register his security, and the fact that his security was unenforceable did not prevent him from registering his security in the new proceedings, should the plan be terminated and new proceedings opened.
Henceforth, the previous creditor can no longer hope to benefit from this security in subsequent proceedings. Registration after the opening judgment, even if formally regular, is now totally ineffective.
For creditors with claims dating back to before the opening of the bankruptcy proceedings, the rule that the registration of security interests ceases applies until the end of the plan from which the debtor benefits, i.e. until the end of the plan or its resolution.
In other words, the creditor can only hope that the debtor fully executes his plan, failing which he will be deprived of any effective guarantee for the payment of his claim within the framework of the distributions.
Conclusion
This decision illustrates the strictness of insolvency law with regard to secured creditors.
It points out that published security interests must be actively maintained and renewed as long as they have not produced an extinctive effect, and that any registration of security interests during the course of the plan is prohibited.
A creditor’s mistake in letting his security lapse, which could previously be made up for in the event of a new bankruptcy proceeding against his debtor, by proceeding to re-register it all the same, is now unforgivable.
This tightening of the regime is intended to reinforce equality between creditors and the security of collective proceedings, by preventing creditors from circumventing the cessation of security registrations by taking advantage of new proceedings.
