Cessation of Payments: the Cour de cassation Clarifies the Scope of a Disputed Claim

Applying to the court for the opening of collective insolvency proceedings requires showing that the debtor is in a state of cessation of payments (cessation des paiements), that is, unable to meet its liabilities that are due with its available assets. In practice, this demonstration runs into a recurring difficulty: how should claims arising from an order made in summary proceedings (référé), partly or wholly disputed before the court on the merits, be treated? In a judgment of 25 March 2026 (Com. 25 March 2026, No. 25-10.686, FS-B), the Commercial Chamber provides a decisive clarification: whether a claim is disputed is measured by the exact scope of the court challenge to which it is subject. A creditor therefore cannot have the whole of the disputed status of a provisional claim held against it where only a part of that claim is actually before the court on the merits.

The previous legal framework

The requirements of a state of cessation of payments

Article L. 631-1 of the French Commercial Code defines the state of cessation of payments as the debtor's inability to meet its liabilities that are due with its available assets. The case law has long required that the debts making up those liabilities be not only due, but also certain and liquid (Com. 12 May 1992, No. 89-15.269; Com. 28 June 2017, No. 16-10.025). The requirement of certainty operates at two levels: at the stage of the admissibility of the creditor's action (Commercial Code, Arts. L. 631-5 and L. 640-5) and at the stage of establishing the cessation of payments itself.

The notion of a disputed claim

A claim is disputed where its final outcome depends on proceedings pending before a court on the merits or results from a decision open to appeal (Com. 22 Nov. 2023, No. 22-19.768). The mere fact that a claim is contested, outside any court proceedings, is therefore not enough to make it disputed.

The treatment of orders made in summary proceedings

The Commercial Chamber has gradually built a coherent framework. A claim arising from an order in summary proceedings whose outcome depends on proceedings on the merits is disputed and excluded from the liabilities that are due (Com. 22 Feb. 1994, No. 92-11.634). Conversely, an order in summary proceedings upheld on appeal and not followed by proceedings on the merits (Com. 16 Jan. 2019, No. 17-18.450) or simply not subject to any appeal (Com. 3 Dec. 2003, No. 01-00.014) is capable of being included in the liabilities that are due. The same solution applies to judgments under appeal, even where accompanied by provisional enforcement (Com. 16 March 2010, No. 09-12.539; Com. 9 Dec. 2020, No. 19-14.437). The conditions for obtaining a provisional award are set out in our article on summary proceedings for a provisional payment where the claim is not seriously disputable.

The contribution of the judgment of 25 March 2026

The facts

A pool of investors had subscribed in October 2021 for convertible bonds in an amount of €3,400,000, bearing annual interest. In the absence of payment, it obtained, by an order in summary proceedings of 19 October 2023, a global provisional award of €3,638,000 – €3,400,000 in principal and €238,000 in accrued interest. The issuing company appealed. Its parent company, for its part, commenced proceedings on the merits on 8 December 2023 disputing the due date of the €3,400,000 principal.

In parallel, the subscribers had summoned the issuing company to compulsory liquidation. Both the court and the court of appeal rejected that application, considering that the claim was disputed as a whole because of the proceedings on the merits, which prevented cessation of payments from being established.

The solution

Citing Articles L. 631-1 and L. 640-1 of the French Commercial Code, the Commercial Chamber sets aside the appeal judgment for lack of legal basis. It lays down an explicit principle: unless it is argued that the claims are the subject of proceedings on the merits, awards made in summary proceedings that have become final are included in the liabilities that are due. Above all, it criticises the appeal judges for failing to examine whether the proceedings on the merits also concerned the claim for interest that was the subject of the provisional award.

A principle of correspondence

The effect of the judgment is to require a targeted analysis of the court challenge. The disputed status of a claim does not "radiate" beyond the scope actually put before the court on the merits. If only a part of the claim – here the principal – is contested, the other parts – here the interest – retain their certain character and must be included in the liabilities that are due. Another recent decision limiting the scope of a ground to the sole claim to which it relates is discussed in our article on inadmissibility pleas within a single summons.

Practical consequences for each party

For the creditor wishing to trigger collective proceedings, the judgment opens a welcome margin for manoeuvre: the debtor can no longer neutralise the whole of a provisional claim by a partial challenge on the merits. Where part of the claim is not contested, it can be used to establish the liabilities that are due. The conduct of this step and the creditor's proof of cessation of payments are set out in our article on summoning the debtor to judicial reorganisation proceedings.

For the debtor, the defence strategy must be rethought. A limited challenge on the merits no longer provides a global shield. To neutralise the whole of a claim, the debtor must now ensure that its action covers all the amounts that may be relied on as part of the liabilities that are due.

For the trial judges, the decision imposes a requirement of finer analysis: they must determine, case by case, exactly which part of the claim is actually before the court in the proceedings on the merits.

Litigation risks identified

1. A strengthening of creditors' offensive strategies, which may exploit the uncontested part of a claim to bring about the opening of collective proceedings;
2. A proliferation of debates on the exact scope of the proceedings on the merits and on the interpretation of the parties' written submissions;
3. A risk of divergent assessments between courts, for lack of a uniform criterion for delimiting the scope of a court challenge;
4. Increased vigilance over the interplay between summary proceedings, appeals and proceedings on the merits, whose respective scopes become structuring;
5. Ancillary challenges – for example on the due date or the calculation – which may be recharacterised as covering only a part of the claim.

Strategies and recommendations

For the creditor:

1. Obtain the widest possible provisional award in summary proceedings, expressly covering each head of claim – principal, interest, penalties – in order to multiply the points of support for the liabilities that are due;
2. Analyse precisely the documents in the proceedings on the merits brought by the debtor in order to identify the parts of the claim that are not contested;
3. Document before the court deciding on the opening of proceedings the exact scope of the proceedings on the merits, by producing the relevant summonses, submissions and operative parts;
4. Consider, where the uncontested part is enough to establish the inability to meet the liabilities that are due, a targeted summons for the opening of collective proceedings.

For the debtor:

1. Frame the challenge on the merits exhaustively across all the sums claimed, so that an uncontested part does not feed into the liabilities that are due;
2. Draft the submissions on the merits with care to make explicit that the challenge covers the whole of the claim, ancillary amounts included;
3. Anticipate, from the summary proceedings stage, the overall strategy of challenge in order to avoid a damaging dissociation between principal and ancillary amounts.

Conclusion

The judgment of 25 March 2026 strengthens the clarity of the cessation of payments regime while limiting delaying strategies. A court challenge can no longer be used as a blanket extinguisher: it neutralises only what it actually targets. For creditors and debtors alike, the precision of the scope of the proceedings – both in summary proceedings and on the merits – becomes a decisive parameter of collective-proceedings litigation. Only a structured analysis from the moment the dispute arises can secure the position adopted and prevent an imprecise wording from producing irreversible consequences at the stage of the opening of collective proceedings.

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