Filing of the Statement of Claims: Checking and Challenging the Admission of Your Claim

A business with which you had a commercial relationship is placed in judicial reorganisation or liquidation. You filed your claim within the time limit, then heard nothing for months. One day, you discover that your claim has been rejected, or admitted for an amount lower than the one you claimed, or challenged by the creditors' representative (mandataire judiciaire). This situation, common in insolvency proceedings, calls for a quick reaction because the time limits for challenging are short and missing them makes the decision final. This guide details the phase in which the statement of claims (état des créances) is filed, the means of checking the admission of your claim and the remedies available before the supervising judge (juge-commissaire) and the court of appeal.

Understanding the place of the statement of claims in insolvency proceedings

From the proof of claim to verification

Every insolvency proceeding (safeguard (sauvegarde), judicial reorganisation (redressement judiciaire) or judicial liquidation (liquidation judiciaire)) requires creditors whose claims arose before the opening judgment to file their claims. This filing must be made within two months of the publication of the opening judgment in the BODACC (French official gazette of civil and commercial announcements), under Article L. 622-24 of the French Commercial Code. This period is extended to four months for creditors domiciled outside mainland France. The time limits and the pitfalls of filing a proof of claim are set out in our article on this formality in insolvency proceedings.

Once the filings are received, the creditors' representative (or the liquidator in a liquidation) verifies the claims. The representative examines each filing against the documents produced, the debtor's accounting books and any observations of the debtor. This verification leads to proposals: admission of the claim, total or partial rejection, or recording of pending proceedings before another court.

The filing of the statement of claims in insolvency proceedings is the culmination of this verification work. The statement of claims is the document that lists, claim by claim, the decisions taken by the supervising judge on the representative's proposal. It is this document that fixes the admitted liabilities and determines, in practice, which creditors are likely to be paid according to their rank.

The central role of the supervising judge

The supervising judge is the magistrate appointed by the court to oversee the conduct of the proceedings and the protection of the interests involved. In matters of claims, the judge performs a judicial function: ruling by order on the admission or rejection of each claim, on the proposal of the creditors' representative, in accordance with Article L. 624-2 of the French Commercial Code.

Three outcomes are possible for each claim:

• admission, on a final or provisional basis, for all or part of the amount claimed
• rejection, total or partial, where the claim is not substantiated or appears unfounded
• a finding that the dispute does not fall within the judge's jurisdictional power, where a serious dispute is outside the judge's competence (for example a dispute for the court dealing with the merits)

Admission may be ordered as an unsecured claim (chirographaire) or by recognising a preferential right or security (pledge, mortgage, Treasury preferential right, etc.). The rank accepted determines the order of payment: this characterisation, often neglected by creditors, deserves particular vigilance because a claim admitted as unsecured although it was secured loses much of its practical value. On how a pledge over a business (nantissement de fonds de commerce) withstands the debtor's insolvency proceedings, see our analysis of this security.

The challenge phase before the statement of claims is filed

The creditors' representative's letter of challenge

Before any decision of the supervising judge, an adversarial phase opens where the creditors' representative envisages challenging a claim. Article L. 622-27 of the French Commercial Code requires the representative to notify the creditor that all or part of the claim is in dispute. This letter, generally sent by registered letter with acknowledgement of receipt, states the subject of the dispute: challenge of the amount, of the nature of the claim, of its preferential character or of its very existence.

This letter of challenge starts a crucial time limit. The creditor has thirty days from receipt to reply and put forward observations. This period is provided for by Article L. 622-27 of the French Commercial Code, which attaches a formidable consequence to silence.

"Failure to reply within the thirty-day period bars any later challenge to the proposal of the creditors' representative, unless the dispute concerns the regularity of the proof of claim." (Article L. 622-27 of the French Commercial Code)

In other words, a creditor who lets this thirty-day period pass without replying loses the possibility of later challenging the supervising judge's decision adopting the representative's proposal. This is one of the most frequent pitfalls of the procedure: the creditor, believing the claim secured because it was filed, does not realise that failing to reply to the letter of challenge amounts to tacit acceptance of the proposed rejection.

What the reply to the letter of challenge must contain

The reply must be reasoned and supported. A mere protest of principle is not enough. The grounds of challenge raised by the representative must be taken up point by point and met with supporting documents: contract, purchase orders, delivery notes, invoices, reminders, acknowledgement of debt, interest calculation, instrument creating the security relied on.

Take the example of a supplier whose claim for goods delivered is challenged on the ground that the deliveries are not substantiated. The supplier's reply will benefit from enclosing the delivery notes signed by the debtor, the corresponding invoices and the history of partial payments already made, which amount to a commencement of acknowledgement. Conversely, a creditor who merely asserts that "the claim is certain" without producing any document runs the risk of a rejection confirmed by the supervising judge.

Filing and publication of the statement of claims

Filing at the court registry and publication in the BODACC

Once the supervising judge has given the decisions, the creditors' representative draws up the statement of claims, which brings together all the decisions of admission, rejection and lack of jurisdiction. This statement is filed at the court registry (greffe), under Articles L. 624-2 and R. 624-8 of the French Commercial Code. The registry then arranges publication in the BODACC.

This publication starts the time limits for remedies. It is therefore the starting point that must be monitored without fail. In practice, it is strongly advisable to consult the BODACC and the registry regularly to check the date on which the statement of claims was filed, rather than wait for a notification which, depending on the case, may not reach the creditor or may reach the creditor late.

How to check the admission of your claim in practice

Any interested person may consult the statement of claims filed at the registry. Consultation makes it possible to check several essential points:

• the exact amount accepted on admission, compared with the amount claimed
• the nature of the admission, final or provisional
• the rank recognised for the claim, unsecured or with a preferential right or security
• any mention of total or partial rejection and its reasons
• any mention of a lack of jurisdiction of the supervising judge referring the matter to another court

This check is not a matter of intellectual comfort: it conditions the exercise of remedies. A creditor who discovers late that the claim was admitted for a lower amount or at an unfavourable rank will no longer be able to react once the time limits for remedies have expired. Vigilance over the date of publication in the BODACC is decisive here.

Remedies for challenging the admission or rejection of a claim

The fundamental distinction between parties heard and third parties

The regime of remedies against decisions on the statement of claims before the supervising judge varies according to the status of the person challenging. This distinction, provided for by Article R. 624-8 of the French Commercial Code, governs the choice of remedy and the applicable time limit.

Two situations must be carefully distinguished. The first concerns the parties to the decision, that is, the creditor whose claim was debated, the debtor and the creditors' representative. These took part, or were given the opportunity to take part, in the verification process. The second concerns third parties, that is, persons who were not parties to the supervising judge's decision but whose interests are affected by the admission of a claim.

Appeal against the supervising judge's order

Where the challenge was the subject of adversarial debate and the supervising judge has made an order ruling on the claim, the remedy open to the creditor, the debtor or the representative is an appeal. This appeal must be lodged within ten days from notification of the order, in accordance with Article R. 621-21 of the French Commercial Code.

This ten-day period is particularly short. It runs from notification of the decision by the registry. A creditor whose claim has been rejected by order of the supervising judge must therefore react without delay, by applying to the court of appeal, failing which the rejection becomes final. Inadmissibility of a late appeal is systematically raised in insolvency proceedings, and the courts ensure strict compliance with this time limit.

It should be stressed that a creditor who did not reply within thirty days to the representative's letter of challenge is, save for an exception relating to the regularity of the filing, deprived of the right to challenge the order. Silence kept at the challenge stage thus closes the door to a later remedy.

Third-party objection to the statement of claims

Third parties, who were not parties to the decision, have a separate route: the objection provided for by Article R. 624-8 of the French Commercial Code. This objection must be brought before the supervising judge within one month of publication of the statement of claims in the BODACC.

This route allows, for example, another creditor to challenge the admission of a competing claim that would reduce the dividend distributed among creditors. An unsecured creditor may thus have an interest in challenging the admission, at a preferential rank, of a claim whose security the creditor considers irregular, since that preferential admission will reduce by the same amount the sums available for the creditor's own payment.

The decision given by the supervising judge on this objection is itself open to appeal under the ordinary-law conditions applicable to orders of the supervising judge.

What to do in practice when a claim is rejected or challenged

React from the letter of challenge

The best defence of a claim is played out upstream, from receipt of the creditors' representative's letter of challenge. A reply must be sent within the thirty-day period, in a reasoned and documented letter. Not replying amounts, in almost all cases, to accepting the proposed rejection.

A creditor faced with a challenge to the amount has an interest in producing a detailed statement distinguishing principal, interest and any contractual penalties, each item being supported by a document. Where the challenge concerns the preferential nature of the claim, the instrument creating the security should be produced and completion of the publicity formalities that determine its enforceability should be shown.

Apply to the court of appeal within ten days

If the supervising judge makes an order of rejection or an unfavourable partial admission, the creditor must quickly assess whether an appeal is worthwhile. The ten-day period requires the elements of the file to be assembled without delay and the notice of appeal to be formalised. An examination of the reasons for the order makes it possible to identify the point contested by the judge and to target the argument before the court.

It is prudent to be assisted by a lawyer from this stage, because the appeal procedure follows rules of representation and time limits whose breach leads to inadmissibility. The shortness of the period leaves little room for improvisation.

The special case of provisional admission and pending proceedings

Where the claim is the subject of a dispute falling within another court, the supervising judge may declare a lack of jurisdiction or stay the decision and refer the parties to have the dispute decided on the merits. In that case, the claim may be admitted on a provisional basis pending the final decision. The creditor must then ensure that the proceedings on the merits are pursued, failing which the provisional admission may never become a final admission.

A common example concerns a contractual liability claim seriously disputed by the debtor, whose very existence depends on a debate on the merits about performance of the contract. The supervising judge, who is not meant to decide such a dispute, refers the parties to the competent court while admitting, where appropriate, the claim on a provisional basis to preserve the creditor's rights.

Anticipating difficulties and securing your claim

The phase of verification and filing of the statement of claims rewards anticipation and penalises passivity. Three reflexes make it possible to secure a claim in insolvency proceedings. First, file the claim within the two-month period with a complete file, because a deficient filing weakens everything that follows. Second, reply systematically and within thirty days to any letter of challenge from the representative. Third, monitor the publication of the statement of claims in the BODACC so as not to let the time limits for remedies expire.

The characterisation of the claim deserves particular attention. A claim that is admitted, but as an unsecured claim although it benefited from a validly created security, loses in practice much of its value. Checking the rank accepted is as important as checking the amount admitted.

Conclusion

The filing of the statement of claims is not a passive formality that the creditor merely undergoes. It is a procedural moment in which the concrete fate of the claim is decided, and where inaction is paid for by being time-barred or by the inadmissibility of remedies. The logic of insolvency proceedings is implacable: each step opens a time limit, and each expired time limit closes a door for good.

The position of this guide is clear: the defence of a claim does not begin at the stage of the remedy, but from receipt of the first letter of challenge. The creditor who replies within thirty days, who documents their position and who monitors publication of the statement of claims in the BODACC keeps every chance. One who waits for a hypothetical notification often wakes up time-barred.

In practical terms, as soon as insolvency proceedings are opened concerning a debtor, put in place strict calendar monitoring: date of publication of the opening judgment, expiry of the two months for filing, possible receipt of a letter of challenge with the thirty-day period, and monitoring of publication of the statement of claims with the ten-day period for appeal and the one-month period for third-party objection. Before deciding to give up challenging, have the supervising judge's order analysed by a lawyer, because the ten-day period leaves no margin for catching up.

Frequently asked questions

What is the time limit for challenging the rejection of a claim before the supervising judge?

Where the supervising judge makes an order rejecting all or part of a claim, the remedy is an appeal, to be lodged within ten days from notification of the order by the registry, under Article R. 621-21 of the French Commercial Code. This period is strict and missing it makes the order final. It is therefore necessary to react immediately on receipt of the notification, by assembling the documents and applying to the court of appeal.

What happens if I do not reply to the creditors' representative's letter of challenge?

Silence kept for more than thirty days after receipt of the letter of challenge bars any later challenge to the representative's proposal, under Article L. 622-27 of the French Commercial Code. In practical terms, a creditor who does not reply loses the right to challenge the rejection that the supervising judge will order. The only exception concerns disputes about the regularity of the proof of claim itself.

How can I find out whether my claim has been admitted and for what amount?

The statement of claims, which lists all the decisions of admission and rejection, is filed at the court registry and published in the BODACC, in accordance with Articles L. 624-2 and R. 624-8 of the French Commercial Code. Any interested person may consult this statement at the registry to check the amount accepted, the nature of the admission (final or provisional) and the rank recognised. It is recommended to monitor the BODACC actively rather than wait for a notification.

Can another creditor challenge the admission of my claim?

Yes. Third parties, notably other creditors, may lodge an objection to the statement of claims before the supervising judge within one month of publication of the statement in the BODACC, under Article R. 624-8 of the French Commercial Code. An unsecured creditor may thus challenge the admission at a preferential rank of a competing claim if the creditor considers the security relied on to be irregular, since that admission reduces the sums available for the creditor's own payment.

What is the difference between final and provisional admission?

Final admission fixes the claim in its amount and rank on a stable basis. Provisional admission occurs where the claim depends on a dispute not yet decided or on pending proceedings before another court; it preserves the creditor's rights pending the decision on the merits. A creditor with a provisional admission must pursue the proceedings on the merits, failing which the admission may never become final.

Can I still act if the two-month period for filing a proof of claim has been missed?

A creditor who is time-barred may apply to the supervising judge for relief from the bar (relevé de forclusion), within six months of publication of the opening judgment, under Article L. 622-26 of the French Commercial Code. The creditor must show that the default is not attributable to the creditor or results from an omission by the debtor when drawing up the list of creditors. This relief is not automatic: the creditor must establish a legitimate reason, strictly assessed by the judge.

Is a lawyer needed to challenge the admission of a claim?

An appeal against the supervising judge's order before the court of appeal follows rules of representation and procedure whose breach leads to inadmissibility, which makes the assistance of a lawyer strongly recommended. At the stage of replying to the representative's letter of challenge, involving a professional makes it possible to build a solid argument and assemble the relevant supporting documents. Given the shortness of the time limits, in particular the ten-day period for appeal, it is prudent to seek advice from receipt of the first challenge.