In the current climate of very distrust of liberalism, the movement to decriminalize business life is upset by the omnipotence of judges. Business leaders are beginning to learn at their expense. It is particularly in case of bankruptcy that expressed the severity of sanctions through the criminal bankruptcy. Who may be affected? What are the elements of this offense and what are the penalties?
Over the reforms, the scope of the crime of bankruptcy has been extended. Since February 15, 2009, are affected not only traders but also including any person carrying out an independent professional and leaders in law or in fact of legal persons under private law.
In case of initiation of proceedings for bankruptcy or liquidation proceedings, the Commercial Code lists five facts wrong, each of which constitutes the offense of bankruptcy (L.654-2).
In practice, the courts pronounced the guilt of the leaders most often for misappropriation of assets (A) or deficiency in the accounts (B).
A) Misappropriation of assets
Numerous facts constitute misappropriation of assets by the courts.
Some have a clear reprehensibility. This is particularly the excessive remuneration of directors or management by the company in receivership personal expenses of the officer and his wife.
is different when is the diversion of customers. At what time does it take action? Many groups of customers common to several of their companies, which often have overlapping activities. Since one of his companies are in trouble, how to avoid common customers postpone their orders to the structure considered most sustainable or most reactive? How also can one expect from a leader of a troubled company that lets customers from competition rather than direct them to another structure in which he is interested?
The position of leadership is more critical then that the interest group can not be invoked as a defense and that the characterization of bankruptcy requires no searching for personal interest.
B) deficiency in the accounts
criminal law provides for two situations each constituent of the offense of bankruptcy.
First, it is the fact of having held a fictitious accounts or the disappearance of records or failed to keep any records when texts are applicable requirement. However, case law treats the delay in submission of accounts to such a fact.
Secondly, it is the fact of having held an obviously incomplete or improper accounting in relation to legal provisions. This criminality is difficult because it depends not on the bad faith of the leader but only on the character "manifest" the failure or irregularity. However, this character "manifest" is left to the discretion of the court. Leader can only rely on the judge, became master of the offense.
In summary, it appears that is the day of the hearing that the fate of the leader is playing.
While prognosis is difficult. The defense must be more carefully prepared than the penalties are heavy. Imprisonment for five years may be pronounced. While it is often accompanied by a stay, it is usually accompanied by a sanction of personal bankruptcy or interdiction of managing. For the corporate executive, is a dramatic penalty when it has no power to find a station employee. This is often the case when senior over the age of fifty.
Michel PASOTTI - Lawyer at the Paris Bar - Doctor of Economics - Paris September 13, 2009
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