Judicial liquidation of a SCI (French property holding company): what the creditor recovers from the building and from the partners

A SCI (French property holding company) whose building is subject to a contractual mortgage does not escape collective proceedings: Article L. 640-2 of the French Commercial Code makes judicial liquidation applicable to any private-law legal entity. For the lender, the shift is abrupt: the property seizure already under way stops, the liquidator takes control of the assets, and the registered rank is worth only what procedural discipline allows to be drawn from it. Two questions govern the recovery rate: when to act against the building, and on what conditions to turn against the partners, who are indefinitely liable for the company's debts. This guide follows the chronology of the registered creditor, from the opening judgment to the distribution of the price, and then to the action based on the partners' liability for the debts of a SCI.

What the judicial liquidation judgment immediately changes for the registered creditor

The judgment that opens or orders the judicial liquidation of the SCI produces, by express cross-reference in Article L. 641-3, the effects provided for in Articles L. 622-21, L. 622-28 (first sentence) and L. 622-30.

Article L. 622-21 prohibits or interrupts any legal action aimed at ordering the debtor to pay a sum of money, and its paragraph II stops or prohibits any enforcement procedure against movable or immovable property and any distribution procedure that had not produced an allocating effect before the opening judgment. The payment order operating as a property seizure (commandement de payer valant saisie immobilière) that has already been published does not disappear, but the procedure is frozen. Paragraph III adds that periods allowed on pain of forfeiture or termination of rights are interrupted, which neutralises the lapse rules specific to property seizure during the suspension. What remains permitted to the creditor despite this suspension is set out in our article on the stay of individual proceedings from the opening judgment.

Article L. 641-9 divests the SCI of its powers: the rights and actions concerning its assets are exercised by the liquidator throughout the liquidation. Any negotiation on the building is therefore conducted with the body of the procedure, under the supervision of the supervising judge (juge-commissaire), and no longer with the manager.

Acceleration, interest and guarantors: three calculation points

Article L. 643-1, in the wording resulting from Law No. 2022-172 of 14 February 2022, makes unmatured claims due where the assets seized by the effect of the procedure constitute the security. The wording is no longer the general acceleration of the former text: it refers to the assets taken in hand by the procedure. Where the court authorises the continuation of activity on the ground that a disposal is conceivable, the due date is postponed to the date of the judgment ruling on the disposal or, failing that, to the date on which the continuation of activity ends.

The halt to the running of interest provided for in Article L. 622-28 contains an exception that is decisive for a SCI's banker: it does not apply to interest resulting from loan contracts concluded for a period equal to or longer than one year or from contracts providing for deferred payment of one year or more. An amortising property loan therefore continues to bear interest, which directly affects the amount to be filed and the basis of the mortgage ranking. By contrast, accrued interest on such claims may not itself bear interest.

The same article suspends actions against individuals who are co-obligors, who have given a personal security or who have assigned or transferred an asset as security, but only until the judgment adopting the plan or ordering the liquidation. In a judicial liquidation ordered outright, the suspensive effect is therefore of no practical scope: the personal guarantor who is the manager or a partner remains exposed. The court may then grant that person time or deferred payment within a limit of two years, and the secured creditor retains the ability to take protective measures.

Registration must be made before the judgment

Article L. 622-30 is unqualified: mortgages, pledges, charges and privileges may no longer be registered after the opening judgment. The text also covers deeds and court decisions that transfer or create real rights, unless they acquired a certain date or enforceable character before the judgment. Since the reform of security interests resulting from Order No. 2021-1192 of 15 September 2021, Article 2418 of the French Civil Code recalls that statutory, judicial and contractual mortgages rank only from the day of their registration in the land register. The vigilance required here concerns post-reform terminology: one now reasons in terms of the special statutory mortgage of the seller and of the lender of funds, and no longer in terms of special real-property privileges. A creditor that let the publication of its security drag, or that relied on the retroactive effect of a privilege, permanently loses its place in the order of ranking.

Filing the claim: the personal notice governs the time limit

The ordinary time limit is set by Article R. 622-24: two months from publication of the opening judgment in the Bulletin officiel des annonces civiles et commerciales, extended by two months for creditors who do not live within the territory of the court seised.

This starting point is not that of the mortgage creditor. Article L. 622-24 requires that creditors holding a published security or bound to the debtor by a published contract be notified personally or, where applicable, at their chosen address for service, and specifies that the filing period runs in respect of them from notification of that notice. The lender registered against the SCI's building must therefore calculate its time limit not from the BODACC publication but from the date of receipt of the liquidator's notice. In practice, the date of notification, its medium and the address used are the first item to secure in the file. On the content of an admissible filing and relief from forfeiture (relevé de forclusion), see our analysis of filing a claim in collective proceedings.

Law No. 2025-1403 of 30 December 2025 amended Article L. 622-24. According to the application note on the text, the provisions resulting from paragraph II of its Article 4 apply to collective proceedings opened and judicial liquidations ordered from 1 January 2027. For proceedings opened in 2026, checking the regime applicable on the date of the judgment is a prerequisite, not a formality.

The sanction has changed in scale since 2021

Article L. 622-26 provides that, failing filing within the time limits, creditors are not admitted to distributions and dividends. Above all, in the wording resulting from Order No. 2021-1193 of 15 September 2021, it provides that claims and security interests not duly filed within those time limits cannot be enforced against the debtor during performance of the plan and after that performance where the undertakings have been met, and, on the same conditions, cannot be enforced against individuals who are co-obligors or who gave a personal security or assigned or transferred an asset as security. The former wording referred only to claims. A registered creditor that neglects the filing no longer loses merely a dividend: it puts its security at risk.

Relief from forfeiture requires showing that the default is not due to the creditor or that it results from an omission by the debtor when drawing up the list of creditors. The action is confined to a period of six months, which runs from publication of the opening judgment or, for holders of a published security or persons bound to the debtor by a published contract, from receipt of the notice given to them. The counterpart is heavy and directly financial: a creditor granted relief from forfeiture may then participate only in distributions made after its application. If the building was sold and the price distributed before the application, the relief restores nothing from that distribution.

Property seizure begun before the judgment: who resumes it, and at what stage

This is the most frequent scenario: the creditor has had its payment order published, sometimes obtained its directions judgment (jugement d'orientation), and the opening judgment falls before the auction. Two texts organise what follows, and they are not to be confused.

Article L. 642-18, paragraph 3, allows the liquidator to be subrogated to the rights of the seizing creditor for the acts that the latter has carried out, which are deemed to have been carried out on behalf of the liquidator who proceeds to sell the buildings. The property seizure may then resume at the stage at which the opening judgment had suspended it. The procedural work already funded by the creditor is therefore not lost, but it benefits the collective proceedings.

Article L. 643-2 deals with the opposite situation, where the creditor itself resumes its proceedings: where a property seizure procedure was begun before the opening judgment, the creditor holding a mortgage is exempted, on resumption of individual proceedings, from the acts and formalities carried out before that judgment. The exemption avoids restarting the procedural chain from the payment order.

The distinction has an immediate tactical consequence. If the liquidator is subrogated and conducts the sale, the creditor no longer controls the timetable or the reserve price, but it avoids the cost of the procedure. If it takes control itself on the basis of Article L. 643-2, it recovers the initiative and the pace, at the price of advancing costs.

The right of individual proceedings under Article L. 643-2: the three-month window

The text is the mortgage creditor's main lever against an inactive liquidator.

Creditors holding a special privilege, a pledge, a charge or a mortgage, and the Treasury for its preferential claims, may, provided that they have filed their claims even if these are not yet admitted, exercise their right of individual proceedings if the liquidator has not begun the realisation of the encumbered assets within three months from the judgment that opens or orders the judicial liquidation.

Three conditions, and a single documentary requirement. The claim must have been filed, even if it is not yet admitted: waiting for the supervising judge's admission order is a costly misreading, since verification of the liabilities generally takes well over three months. The asset must be encumbered by the security. And the liquidator must not have begun the realisation of the encumbered asset within three months of the judgment.

One reservation exists: where the court has set a period under Article L. 642-2, the right of individual proceedings may be exercised only on expiry of that period, and only if no offer including that asset has been made. The case arises where a sale of the business as a whole is contemplated, for example where the SCI's building is operated by a related company also in proceedings.

In the event of a sale of buildings on individual proceedings, Article L. 643-2 refers to the first, third and fifth paragraphs of Article L. 642-18. In concrete terms, the pursuing creditor does not return to an ordinary property seizure wholly free from the collective proceedings: the forms of the sale remain those of Book VI, and the distribution of the price is outside the creditor's control.

Good practice is to enter the date "judgment + three months" in the internal calendar, to document in writing the liquidator's lack of action on the encumbered asset, and then to notify its intention to resume proceedings. In most cases, this notification is enough to speed up the liquidator's putting the asset on sale, which is often the real objective.

Realisation of the building: terms of sale and clearing of charges

Article L. 642-18 organises the sale of buildings by reference to Articles L. 322-5 to L. 322-12 of the French Code of Civil Enforcement Procedures, with the exception of Articles L. 322-6 and L. 322-9, and subject to consistency with Book VI. The supervising judge sets the reserve price and the essential conditions of the sale. For the registered creditor, this is the most profitable point of intervention: an undervalued reserve price on a commercial or residential asset in Paris results mechanically in partial ranking. Producing an adversarial valuation and market evidence before the order is made is better than a later challenge.

The supervising judge has two alternatives to a court auction where the make-up of the assets, their location or the offers received justify it: ordering a sale by agreed auction (adjudication amiable) on the reserve price that the judge sets, or authorising a private sale at the price and on the conditions that the judge determines. In the case of an agreed auction, a higher bid (surenchère) may always be made.

The clearing effect is subject to payment: for auctions carried out under the preceding paragraphs, payment of the price to the liquidator and of the costs of the sale clears the mortgages and any privilege arising from the debtor. Until those payments have been made, the purchaser may carry out no act of disposal of the asset, except the creation of a mortgage ancillary to a loan contract intended for the acquisition of that asset. Monitoring actual payment of the price into the liquidator's hands is therefore part of the registered creditor's oversight.

Distribution of the price and the registered creditor's rank

The same Article L. 642-18 entrusts the liquidator with distributing the proceeds of the sales and settling the order between creditors, subject to disputes brought before the enforcement judge (juge de l'exécution). The registered creditor is therefore not ranked by an ordinary ranking judge: it is ranked by the body of the procedure, and its recourse lies before the enforcement judge. Challenging requires having analysed the draft distribution as soon as it is communicated, item by item, on the basis of the claim as well as on rank.

Article L. 643-4 governs how successive distributions interact. If one or more distributions of sums precede the distribution of the price of the buildings, the admitted preferential and mortgage creditors participate in the distributions in proportion to their total claims. After the sale of the buildings and the final settlement of the order, those who rank within the useful range on the price of the buildings for the whole of their claim receive the amount of their mortgage ranking only after deduction of the sums already received, the sums so deducted benefiting the unsecured creditors. The mechanism prevents any double payment and must be factored into recovery forecasts from the first interim payment.

There remains the competition of post-opening claims, often underestimated in SCI cases: co-ownership charges, insurance, and costs of preserving or securing the building arising after the judgment. Article L. 641-13, in the wording resulting from Law No. 2023-973 of 23 October 2023 applicable to liquidations opened or ordered after its promulgation, provides that, except for the costs and expenses of the procedure, unpaid claims lose the privilege conferred on them by paragraph II if they have not been brought to the liquidator's attention by six months at the latest from publication of the judgment opening or ordering the liquidation or, failing that, within one year from that of the judgment adopting the disposal plan. A co-ownership association (syndicat de copropriétaires) that is a creditor for post-opening charges, like a service provider that has preserved the building, has every interest in keeping to this timetable.

The complete order of distribution between the different ranks falls under Article L. 643-8 of the French Commercial Code, the applicable wording of which must be checked case by case before any projection of a recovery rate. The hierarchy of distribution between those ranks is set out in our article on the order of payment of creditors in judicial liquidation.

Recourse against the partners: liability for debts, subsidiarity, limitation

This is the particular feature of the SCI, and the source of recovery that institutional creditors exploit least systematically.

An indefinite but joint liability

Article 1857 of the French Civil Code provides that, as regards third parties, the partners are indefinitely liable for the company's debts in proportion to their share in the share capital on the date the debt falls due or on the date of cessation of payments. Two consequences. First, there is no joint and several liability: the creditor must divide its claims and may claim from each partner only its share of the capital. Second, the reference date is decisive, and the date of cessation of payments set by the opening judgment becomes a recovery parameter. Identifying the partners and the split of the capital on that date, by examining the articles of association, transfers of shares and whether they can be relied on against third parties, is preparatory work in its own right. A partner who contributed only industry (labour or know-how) is liable like the partner whose holding in the share capital is the smallest.

The condition of prior and fruitless proceedings

Article 1858 lays down a condition of subsidiarity: creditors may pursue payment of the company's debts against a partner only after having first and fruitlessly pursued the legal entity. Whether the opening of the SCI's judicial liquidation, or its closure for insufficient assets, is enough to establish these prior and fruitless proceedings is not settled by the text itself and is a matter for case law. Likewise, the texts read settle neither whether filing in the SCI's liabilities is a condition of the later action against the partners, nor how that individual action fits with the liquidator's monopoly to act in the name and in the collective interest of the creditors (Article L. 622-20, applicable in liquidation by Article L. 641-4). The stay of proceedings under Article L. 622-21 refers, on its wording, only to the debtor. These three points justify a case-by-case analysis before any originating step: a premature summons against a partner exposes the creditor to an inadmissibility objection.

The trap of the starting point of the five-year limitation period

Article 1859 provides that all actions against partners who are not liquidators, or their heirs and successors, are time-barred after five years from publication of the company's dissolution. Yet, since Order No. 2014-326 of 12 March 2014, Article 1844-7, 7° refers to dissolution by the effect of a judgment ordering closure of the judicial liquidation for insufficient assets, and no longer to the judgment ordering the judicial liquidation. A SCI in judicial liquidation is therefore not dissolved by the opening judgment alone. The reasoning must still be conducted with caution where no dissolution is published: computing the period in that case is a matter for case law, and the prudent position is never to let the action against the partners be built late on an optimistic reading of the starting point.

Closure for insufficient assets: what survives and what is extinguished

Article L. 643-11 provides that the closure judgment for insufficient assets does not restore to creditors the individual exercise of their actions against the debtor, that is, against the SCI itself. The exceptions in paragraph I are exhaustive (assets acquired by way of a succession opened during the procedure, a claim arising from an offence for which the debtor's guilt has been established or relating to rights attached to the creditor's person, a claim arising from fraudulent conduct to the detriment of social protection bodies). Paragraph III adds cases of resumption, notably personal bankruptcy or fraudulent bankruptcy (banqueroute), and paragraph IV allows the court, in the event of fraud against one or more creditors, to authorise the resumption of individual actions.

Paragraph V imposes a formality that creditors frequently forget: those who recover their right of individual proceedings and whose claims have been admitted may not exercise that right without having obtained an enforceable title or, where they already hold such a title, without having had it established that they meet the conditions laid down in the article, the president of the court ruling by order. Acting without that order means running the risk of the enforcement measure being annulled.

The registered creditor's decision timetable

• Opening judgment: check the date of cessation of payments adopted, the state of registrations in the land register and whether the security was published beforehand (L. 622-30, Art. 2418 French Civil Code).
• Receipt of the personal notice: starting point of the filing period for a creditor holding a published security (L. 622-24), to be kept and dated with care.
• Filing of the claim within the two-month period so calculated (R. 622-24), including loan interest where the term is one year or more (L. 622-28).
• Judgment + three months: opening of the individual-proceedings window if the liquidator has not begun realisation of the encumbered asset (L. 643-2), subject to a period set under L. 642-2.
• Six months from receipt of the notice: end of the action for relief from forfeiture for the holder of a published security (L. 622-26), bearing in mind that relief opens up only distributions made after the application.
• Six months from publication of the judgment: informing the liquidator of preferential post-opening claims, on pain of losing the privilege (L. 641-13 III).
• Supervising judge's order setting the reserve price and the essential conditions of the sale: the useful moment to produce an adversarial valuation (L. 642-18).
• Draft distribution: challenge before the enforcement judge (L. 642-18), taking into account the set-off provided for by L. 643-4.
• Closure for insufficient assets: dissolution of the SCI (Art. 1844-7, 7° French Civil Code), publication, and start of the reasoning on the five-year limitation period of Article 1859 for the action against the partners.

Conclusion

In the judicial liquidation of a SCI, mortgage rank guarantees nothing on its own. What distinguishes cases is keeping to three dates: receipt of the personal notice, which fixes the filing period and that for relief from forfeiture; the three-month term of Article L. 643-2, which gives the registered creditor back the initiative over the building; and the moment at which the supervising judge sets the reserve price, which in reality determines the distributable proceeds. Recourse against the partners, based on the indefinite but joint liability under Article 1857, is the second source of recovery, provided that the condition of prior and fruitless proceedings under Article 1858 and the mapping of the capital on the relevant date have been secured beforehand.

Operational recommendation: on receipt of the liquidator's notice, have a written procedural timetable drawn up covering the two-month, three-month and six-month deadlines, and immediately order a mortgage status certificate as well as a copy of the SCI's articles of association and share transfers. These two items decide, well before the sale, what you will recover.

Frequently asked questions

Can a SCI be placed in judicial liquidation? Yes. Article L. 640-2 of the French Commercial Code makes the judicial liquidation procedure applicable to any private-law legal entity, which includes the société civile immobilière, whether family, asset-holding or investment. The judgment divests the SCI, whose rights and actions over its assets are exercised by the liquidator under Article L. 641-9. No new liquidation procedure may be opened against the same debtor as long as the one in progress has not been closed.

Must the mortgage creditor wait for its claim to be admitted before resuming the property seizure? No. Article L. 643-2 allows the creditor holding a mortgage to exercise its right of individual proceedings provided that it has filed its claim even if it is not yet admitted, if the liquidator has not begun the realisation of the encumbered assets within three months from the judgment that opens or orders the judicial liquidation. Where the court has set a period under Article L. 642-2, this right may be exercised only on expiry of that period and if no offer including the asset has been made.

From what date does the filing period run for a bank registered against a SCI's building? Not from publication in the BODACC. Article L. 622-24 requires personal notice to creditors holding a published security or bound to the debtor by a published contract, and specifies that the filing period runs in respect of them from notification of that notice. The period is two months under Article R. 622-24, extended by two months for creditors who do not live within the territory of the court. The date of receipt of the notice must be kept, because it also sets the start of the six-month period for relief from forfeiture.

What does a creditor risk if it does not file its mortgage claim within the time limits? It is not admitted to distributions and dividends. Since Order No. 2021-1193 of 15 September 2021, Article L. 622-26 adds that claims and security interests not duly filed within those time limits cannot be enforced against the debtor on the conditions it specifies, nor against individuals who are co-obligors or who gave a security. Relief from forfeiture remains possible within the six-month period, but the creditor granted relief may participate only in distributions made after its application.

Is a property seizure begun before the opening judgment lost? No, it is stopped by Article L. 622-21 II, and periods allowed on pain of forfeiture or termination of rights are interrupted. Two outcomes are provided for: the liquidator may be subrogated to the rights of the seizing creditor, the seizure then resuming at the stage at which the opening judgment had suspended it (L. 642-18); or the mortgage creditor resumes its individual proceedings, in which case Article L. 643-2 exempts it from the acts and formalities carried out before the opening judgment.

Can a creditor pursue the partners of a SCI in judicial liquidation? Article 1857 of the French Civil Code makes the partners indefinitely liable for the company's debts in proportion to their share in the share capital on the date the debt falls due or on the date of cessation of payments: the liability is indefinite but joint, and therefore divided. Article 1858 requires that the legal entity have first and fruitlessly been pursued. The exact effect of the collective proceedings on that condition, and how it fits with the liquidator's monopoly to act in the collective interest of the creditors, are matters for case law and must be assessed case by case.

When does the five-year limitation period against the partners begin? Article 1859 of the French Civil Code starts the five-year limitation period for actions against partners who are not liquidators from publication of the company's dissolution. Yet, since Order No. 2014-326 of 12 March 2014, Article 1844-7, 7° no longer refers to the judgment ordering the judicial liquidation but to the judgment ordering closure of the judicial liquidation for insufficient assets. The SCI is therefore not dissolved by the opening judgment alone, and the computation of the period where no dissolution has been published must be checked against the applicable case law.