The prohibition for a director to buy back their own company at auction is a strong principle of French law, aimed at preventing the opportunistic erasure of debts. However, exceptions do exist. In this article, Maître Patricia Guyomarc’h analyses the procedural relaxation introduced during the health crisis and recalls the foundations of Article L.642-3 of the Commercial Code.
The analysis demonstrates that the 2020 order did not create a new right, but rather simplified a «procedural shortcut» to encourage business survival. Maitre Guyomarc'h points out that outside of these exceptional measures, the debtor's ability to resume their business remains possible, but is strictly governed by the prior examination of the Public Prosecutor's Office.
This expert note illustrates the firm's ability to navigate complex and evolving regulations to safeguard the business. It reminds directors that a divestment plan can, under strict conditions and with robust argumentation, become a tool for the entrepreneur's own recovery, provided that job preservation and creditor payment are maintained.
