Transfer plan and extension for commingling of assets: the liquidator races against time

By Pierre-Louis Roquet, Attorney at the Lyon Bar | 28 juillet 2026 | Reading time : 9 min
Modern vector illustration: navy blue hourglass and business building split into two blocks

Cass. com., July 1, 2026: the approval of a transfer plan, whether total or partial, renders an action for extension due to commingling of assets inadmissible.

Analysis of a Cass. com. ruling, July 1, 2026, n° 25-16.192, by Pierre-Louis Roquet, a business law attorney in Lyon.

On August 31, 2022, the company Korbey d'Or was placed in liquidation judiciaire (court-ordered liquidation). The court authorized the continuation of its business activity with a view to a plan de cession (transfer plan). This authorization was renewed on November 16, 2022, and again on February 28, 2023. In the interim, on November 21, 2022, the liquidator initiated proceedings against Sylver Asset Management, known as Sygma, seeking the extension of the liquidation judiciaire due to confusion des patrimoines (commingling of assets). On March 29, 2023, the court granted this request. Two days later, on March 31, 2023, the same court approved Korbey d'Or's transfer plan. Sygma appealed the extension judgment. On April 30, 2025, the Saint-Denis Court of Appeal declared the liquidator's action inadmissible. The Cour de cassation rejected the appeal on July 1, 2026 and published its decision in the Bulletin.

The case unfolded over forty-eight hours and was lost in three years. It offers two lessons, one on appellate procedure, the other on business insolvency law. Both converge on one point: timing is critical.

In fast-track procedure, reopening debates does not reopen discovery

The first ground of appeal concerned Article 444 of the Code of Civil Procedure. In a ruling dated September 18, 2024, the Court of Appeal raised, ex officio, a matter of public policy. It ordered the reopening of debates and referred the case to a fast-track hearing scheduled for November 20, 2024. At the same time, it ruled that there was no need to revoke the closing order, limiting the parties' observations to the ex officio point raised. The liquidator saw a contradiction in this. The Second Civil Chamber has indeed held, since a ruling of February 19, 2009, that the reopening of debates entails the revocation of the closing order when the case is referred to mise en état (case management).

The Commercial Chamber dismissed the grievance by focusing on the procedural circuit followed. The case had been set for a short deadline in application of Article 905 of the Code of Civil Procedure. This procedure does not involve mise en état. No referral to mise en état was therefore conceivable, and the 2009 solution did not apply. As long as the parties had been invited to explain themselves on the point raised ex officio, the adversarial principle was respected without needing to revoke the closing order.

The consequence is concrete. Revocation would have restored the liquidator's ability to submit arguments freely, including on the merits. The refusal locked the debate to the sole question of admissibility. Article 905 was rewritten by the decree of July 18, 2025, but the short deadline remains, and the procedure is still without mise en état. The solution thus retains its full scope before the courts of appeal, particularly in collective proceedings where appeals are frequently fast-tracked.

The transfer plan extinguishes the extension action, even if won in the first instance

The second ground of appeal concerned the interplay between the plan de cession and the extension for confusion des patrimoines. The Commercial Chamber had ruled, on September 27, 2017, that the adoption of a total transfer plan precludes this extension. It had extended the rule to a partial transfer plan on December 5, 2018, in a case originating from the Lyon Commercial Court. The ruling of July 1, 2026, consolidates both hypotheses into a single formula: it follows from Articles L. 621-2 and L. 642-1 of the Commercial Code that the approval of a transfer plan, whether total or partial, precludes the extension of the liquidation judiciaire.

The real contribution lies in the timeline. In previous cases, the extension action had been initiated after the plan's approval. Here, the summons preceded it by sixteen months, and the extension judgment by two days. The liquidator had obtained their decision before the plan existed. They could legitimately believe that the Court of Appeal would only have to confirm it.

The Court responds that admissibility is assessed on the date the court of appeal rules. The reasoning relies on the effet dévolutif (devolution effect). The court does not review the judgment based on the circumstances prevailing before the lower court; it judges anew, based on the case file as it stands on the day of its ruling. However, on that date, Korbey d'Or's transfer plan had been approved by an irrevocable judgment. The singularity of the collective proceedings then prohibited reconstituting, through extension, an entity whose assets had just been transferred. The provisional enforcement granted to the extension judgment changed nothing: it authorized enforcement, not the freezing of applicable law.

What the liquidator must anticipate before the plan is approved

The practical lesson is harsh. An appeal freezes nothing. A liquidator who won in the first instance holds only a provisional position, which the approval of the plan is sufficient to undermine. The party targeted by the extension thus has a formidable passive defense: appeal, then wait for the plan to be approved. Time works against the legal representative.

Two immediate reactions are necessary. The first is to initiate an extension action as early as possible, as soon as signs of commingling appear, without waiting for the continuation of business activity to become established. The second is to ask the court to postpone the examination of the transfer plan, or to extend the continuation of business activity, until the extension action has been definitively decided. This request has an economic cost and faces the urgency of takeover offers. Nevertheless, it deserves to be made and justified in writing, as it is now the only way to preserve the usefulness of the action. Before the Lyon Economic Activities Court, as before other courts now competent in collective proceedings, coordination between the body that processes the plan and the one that pursues the commingling of assets becomes a matter of method, not circumstance.

The ruling leaves several questions open. It says nothing about the fate of actions for liability for insufficiency of assets directed against a director, which do not seek to reconstitute an estate and are not affected in principle by the plan's approval. Nor does it rule on actions for commingling initiated after the plan, when the plan is subsequently terminated, a scenario in which the debtor's procedure regains its purpose. It also does not resolve the distinct question of a plan de sauvegarde (safeguard plan) or redressement (reorganization) by way of continuation, whose logic is not that of asset realization. These are all areas where practitioners retain room for argumentation, provided they consider them before the court rules on offers.

Frequently Asked Questions

Does a transfer plan prevent extending the procedure to a sister company?

Yes. The approval of a transfer plan, whether total or partial, precludes the extension of liquidation judiciaire for confusion des patrimoines. The reason lies in the singularity of the collective proceedings: once assets have been transferred, the extension can no longer fulfill its function, which is to collectively seize a single economic entity. The rule applies regardless of the capital link between the companies concerned.

Does an appeal against the extension judgment suspend the approval of the transfer plan?

No, and this is the whole point of the ruling. The appeal does not prevent either the examination of takeover offers or the approval of the plan by the court. The extension judgment accompanied by provisional enforcement does not further protect the liquidator. The latter must explicitly request that the examination of the plan be postponed if they wish to preserve their action.

What date is used to assess the admissibility of an extension action?

On the date the court of appeal rules, and not that of the first-instance judgment. The effet dévolutif leads the court to judge anew, based on the case file as it stands on the day of its ruling. A plan approved after the judgment but before the ruling therefore renders the action inadmissible, even if it succeeded before the lower court.

Does a partial transfer plan have the same effect as a total plan?

Yes. The Commercial Chamber had already acknowledged this on December 5, 2018, in a case from the Lyon Commercial Court. The ruling of July 1, 2026, confirms this in a unified formula that covers the transfer plan, whether total or partial. The distinction between the two figures therefore has no bearing on the admissibility of the extension action.

What can the liquidator do to preserve their extension action?

They must act early and request the court to suspend the examination of the plan, or to extend the continuation of business activity, until the extension is decided. The request must be in writing, motivated by the existence of serious indications of commingling, and quantified as to its consequences on cash flow. Failing this, the action loses its purpose as soon as the plan is approved.

Does reopening debates on appeal always revoke the closing order?

No. It entails revocation when the case is referred to mise en état, in accordance with the solution adopted by the Second Civil Chamber in 2009. But when the case has been set for a short deadline under Article 905 of the Code of Civil Procedure, a procedure without mise en état, the reopening of debates leaves the closing order intact. The parties' observations are then limited to the point on which the court invited them to explain themselves.

Is there still recourse against directors once the plan is approved?

The ruling does not address this point. An action for liability for insufficiency of assets does not aim to reconstitute an estate and therefore seems unrelated to the obstacle posed by the plan. Common law actions against third parties who participated in the debtor's impoverishment also retain their autonomy. A case-by-case analysis remains essential before pursuing these avenues.

Sources

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