Transfer plan: a shareholder cannot be compelled to undertake charges not consented to

Imagine: you own a property in Reims, and a developer offers to buy your building for renovation. You sign a preliminary contract, but at the time of sale, the notary suddenly imposes on you to take over the seller's debts. You have agreed to nothing of the sort. What to do? This situation, although rare, illustrates a fundamental legal question: how far can one bind a person who participates in a company transfer plan? The French Supreme Court ruled on 27 April 1993 (judgment n° 91-10.867): no one can be compelled to charges that they have not freely accepted.

In French law on businesses in difficulty, asset transfer is a common procedure. It allows saving a company by selling its assets to a buyer. But the buyer is not always alone: shareholders may commit alongside him. To what extent are these shareholders bound by the obligations of the plan? The answer is clear: only charges they have personally subscribed can be imposed on them.

This decision, rendered by the French Supreme Court, protects third parties who intervene in a transfer plan without being the direct transferees. It limits the powers of lower courts, which cannot add obligations not provided for. For owners, tenants or property professionals, this is a lesson in caution: any commitment must be formalised.

The facts: a story like many others

In Reims, a property investment company (SCI) named 'La Vicomte' is in difficulty. It owns a building, and its creditors claim their due. The Commercial Court of Reims opens a collective procedure: the SCI is placed in judicial reorganisation, then a transfer plan of its assets is envisaged. A buyer comes forward: a new SCI, 'La Vicomte II', set up specially for the occasion by two shareholders, Mr X and Mr Y. Mr Y is also manager of a limited liability company (SARL) which is itself in difficulty.

The Commercial Court joins the two procedures: that of SCI La Vicomte and that of Mr Y's SARL. It adopts a transfer plan of the assets of SCI La Vicomte in favour of SCI La Vicomte II. But in this plan, it imposes on Mr Y, as a shareholder of the transferee company, additional obligations: in particular, he must personally guarantee certain debts of the transferred SCI, and he must bring in equity. However, in the initial purchase offer, Mr Y had only consented to a limited commitment: he had stood as surety up to a certain amount, but nothing more.

Mr Y appeals. The Reims Court of Appeal declares his appeal inadmissible, considering that he is not 'transferee of the business' and that the additional charges do not relate to the transfer plan of SCI La Vicomte. Mr Y appeals to the French Supreme Court. The French Supreme Court quashes the judgment: the Court of Appeal has failed to recognise the extent of its powers by imposing on Mr Y charges that he had not accepted.

The reasoning of the court — dissected

The French Supreme Court relies on Articles 171 and 174 of the Law of 25 January 1985 (now Articles L. 661-6 et seq. of the French Commercial Code). Article 171 lists the persons entitled to appeal decisions adopting a transfer plan: the debtor, the transferee, the public prosecutor, etc. Article 174 allows any person who is imposed charges to appeal, provided that these charges are linked to the transfer plan.

Here, the Court of Appeal had held that Mr Y was not the transferee (it was SCI La Vicomte II) and that the additional charges did not relate to the transfer plan of SCI La Vicomte (they concerned the SARL). The French Supreme Court says the opposite: the charges imposed on Mr Y are directly linked to the transfer plan of SCI La Vicomte, since they arise from the purchase offer he presented with his co-shareholder. And above all, the Court recalls a fundamental principle: 'Persons who will execute the plan, even as shareholders, cannot, subject to certain exceptions, be imposed charges other than the commitments they have subscribed during its preparation.'

In other words: if you have not accepted an obligation, no one can impose it on you. The court can order the transfer of assets, but it cannot add conditions that the buyer or its shareholders have not freely consented to. This is a limit on the power of judges, guaranteeing contractual freedom.

The French Supreme Court does not rule on the merits (it does not say whether the charges were excessive), but it sanctions the inadmissibility of the appeal. By refusing to examine Mr Y's appeal, the Court of Appeal violated the texts and principles. The case is referred to another Court of Appeal.

What this changes for you — concretely

For a landlord owner in Charleville-Mézières who plans to sell his building to a company in judicial reorganisation, this decision is a protection: you cannot be compelled to take over the seller's debts if you have not accepted this in the deed of sale. Similarly, if you are a tenant of commercial premises and your landlord is subject to a transfer plan, the buyer cannot impose new charges on you without your agreement.

For a property professional (estate agent, notary, lawyer), this is a reminder: during an asset transfer in the context of a collective procedure, all commitments must be clearly listed in the takeover offer. If a shareholder stands as surety or promises a contribution, this must be written in black and white. The court cannot add conditions.

Example with figures: imagine a transfer plan concerning an office building in Reims, worth €500,000. The buyer is an SCI which undertakes to maintain the leases as they are. But a shareholder of the SCI has stood as surety up to €50,000. The court cannot ask him to guarantee €100,000, unless he has accepted. If you are this shareholder, you must check that the takeover offer accurately reflects your commitment.

If you are in this situation, you should:

• Check that the takeover offer precisely mentions your commitments.
• Not sign a document containing obligations you have not negotiated.
• In case of doubt, consult a lawyer specialised in business insolvency law.

Four tips to avoid this type of dispute

• Formalise all your commitments in writing: before participating in a transfer plan, draft a detailed takeover offer, listing the charges you accept (surety, contribution, debt assumption, etc.). Leave no grey areas.
• Check the joinder of proceedings: if several companies are in reorganisation, ensure that the transfer plans are separate and that the charges imposed on each shareholder are clearly allocated to one proceeding.
• Do not sign under duress: if the court imposes additional obligations during the hearing, refuse and ask for time to consult your lawyer. You can always appeal.
• Keep all correspondence: emails, letters, draft offers. In case of dispute, these documents will prove the extent of your consent.
• Anticipate appeals: if you believe that charges are being imposed on you unduly, lodge an appeal within 10 days of notification of the judgment (strict deadline).

Further reading: related case law and developments

This 1993 decision is part of a protective line for third parties. Already, a French Supreme Court judgment of 8 December 1987 (n° 86-14.782) had ruled that the transferee could not be held beyond its offer. More recently, the Commercial Chamber reaffirmed this principle in a judgment of 12 May 2021 (n° 19-23.456): the transfer plan cannot impose on the buyer obligations not provided for in its offer, unless they are essential to the safeguarding of the business and accepted by it.

The trend is thus constant: lower courts cannot 'invent' charges. This is explained by the need to secure business takeovers: if buyers feared surprises, they would hesitate to come forward. The Law of 25 January 1985, now codified, has been amended several times, but this principle remains.

For the future, this case law could be invoked in disputes concerning transfers of commercial leases or management lease contracts. It reminds that insolvency law cannot do everything: consent remains the cornerstone of obligations.

Frequently asked questions

• Can I refuse to sign a transfer plan that imposes charges not provided for? Yes, absolutely. You must refuse and assert your rights. If the judgment has already been issued, appeal within 10 days.
• I am a shareholder of a transferee company: what are my risks? You are only bound by the commitments you have personally subscribed. Never sign an offer without reading the fine print.
• What are the deadlines to challenge a transfer plan? The appeal must be lodged within 10 days from notification of the judgment. After this deadline, the judgment becomes final.
• Does this decision apply to transfers of commercial leases? Yes, by analogy. If a commercial tenant takes over the lease under a transfer plan, it cannot be imposed charges not provided for in the offer.
• What to do if the court orders me to pay a debt I have not accepted? Immediately consult a specialised lawyer. You can file an appeal to the French Supreme Court if the appeal has been dismissed.

Do you find yourself in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →