Principle

Article 244 of the French bill of July, 24th 1996 indicates that “administrators are liable to the company or any third party, either individually or jointly and severally, of any form of management fault, such as breach on commercial and private companies’ law or by violation of the company’s articles of association”.

Article 180 of the French bill of January, 25th 1985 states that “when the receivership or liquidation of a corporate body reveals a discrepancy regarding the assets, a court of law can decide, in the case of a management fault leading to such discrepancy, that debts of the corporate body will be supported, either partly or in full, with or without joint responsibility, by either some of or all management members, de facto or de jure, whether paid or not…”

A management fault can be twofold:

• “Positive” facts such as lack of bookkeeping upkeep, accountancy irregularities, or non-faulty practices causing detrimental consequences to the company…
• Faultive negligence: lack of updated or complete absence of well-adapted management tools.

Our role consists in determining the presence or absence of a management fault.

Our means

We appraise:

• Accountancy irregularities: distortion between the economic reality and the way it is reflected in the company’s accounts. In that case, our intervention results in evaluating the economic reality of a company and verifying that it is duly reflected in its accounts.
• Events not being illegal in themselves but leading to indirect breach of a law or regulation, thus causing detrimental consequences to the company.

Our intervention includes an economic and financial appraisal of what the company’s situation would have been without management fault - including both the economic context and competitive environment the company was in at the time.

Results

 Drawing up a financial memo endorsing the legal argumentation of our client’s advisors
 unselling the company during all administrative and judicial proceedings

We helped them

 Picogiga, Moulinex c/ Brandt