Judicial liquidation: how does it work? | EUROtoday

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Habitat won’t have saved the furnishings. On December 28, the Bobigny courtroom positioned the furnishings model in liquidation because of its critical monetary difficulties. The courtroom remembers “that there is no possibility of developing a recovery plan” and that the scenario was “irreparably compromised”, specifically “because of the absence of cash and the impossibility of using the brand “.
“The company no longer has any turnover, the stores are closed” and “the outstanding balance of undelivered customers who have paid a deposit is 9 million euros”, it’s specified within the judgment. The firm employs 315 staff.

How does a judicial liquidation happen? What is the distinction with a receivership? Here’s what it’s essential know.

From judicial restoration to judicial liquidation

When an organization finds itself in cessation of funds, and within the absence of a conciliation process, it should request the opening of a judicial restoration process, on the newest inside 45 days following the cessation of funds, earlier than the industrial courtroom.

Once the process is opened, the corporate advantages from safety since any proceedings carried out by collectors are suspended. An financial and social evaluation of the corporate is carried out throughout a so-called statement interval. At the top of this, both a restoration plan is established, for a most period of ten years, or a partial or whole sale is set. Unless restoration seems unattainable, during which case judicial liquidation is ordered.

Judicial liquidation

A judicial liquidation places a definitive finish to the corporate’s exercise. A authorized consultant is appointed to be liquidator: he sells the belongings (items, gear, buildings, lease rights, and many others.) to pay the collectors, and dismisses the staff.

Employees’ employment contracts are terminated inside a most interval of 15 days following the judgment deciding on judicial liquidation. This interval is prolonged to 21 days when a job safety plan is established. Claims arising from the termination of the employment contract (salaries, bonuses, allowances, contributions and social safety contributions, and many others.) are coated by wage assure insurance coverage.

The judgment which opens the judicial liquidation additionally designates a judge-commissioner who’s liable for making certain the sleek operating of the process and the safety of the pursuits concerned. Liquidation closes when the corporate has been capable of repay all of its money owed, or when it has offered all of its belongings. From this level on, the corporate not exists as a authorized entity.