The judicial appointment of a provisional administrator is an exceptional measure traditionally permitted only when two cumulative conditions are met: the inability of the company to function normally and the existence of an imminent threat to its survival or operations (Cass. com., February 6, 2007, no. 05-19.008). Furthermore, the applicant must demonstrate a legitimate interest, which the courts assess strictly (Cass. com., February 14, 1989, no. 87-13.719). In a recent case (Cass. com., May 7, 2025, no. 23-20.471), two investment companies, acting as creditors of a company managed by their former executive, requested the appointment of a provisional administrator. The court of appeal rejected their request, and an appeal to the Court of Cassation was filed. The Court rejected the appeal, not by disputing whether the substantive conditions were met, but by substituting a new legal basis: “A creditor of a company does not have standing to request the appointment of a provisional administrator.” This ruling introduces a new admissibility condition based not only on legitimate interest but also on the applicant’s legal status.
Until now, case law had suggested that even non-shareholders could initiate such proceedings, provided they had a legal connection with the company (Cass. com., February 16, 1988, no. 86-16.241; Cass. 3e civ., January 17, 2019, no. 17-26.695). Creditors were thus allowed to act, provided they demonstrated legitimate interest and the two substantive conditions were fulfilled. The decision of January 22, 2025, had even reaffirmed this view, stating: “Any person demonstrating a legitimate interest has standing to request the appointment of a provisional administrator” (Cass. com., January 22, 2025, no. 22-20.526).
This new requirement of legal standing, rather than merely a legitimate interest, raises numerous questions. What about bondholders? Do they still have standing despite their special creditor status? What about dismissed directors—can they still request an appointment if they act in the company’s interest? And what about employees, who may also be considered creditors in some cases? Does this decision exclude them from acting? This change effectively transforms what was previously an open action into a restricted one, potentially excluding key stakeholders from corporate governance during times of crisis.
In some situations, the appointment of a provisional administrator is the only effective remedy to overcome deadlock or fraudulent management. By significantly restricting who has standing to request this measure, the Court undermines access to it. A clarification of the applicable regime is now necessary, whether through further case law or legislative intervention. With this decision, the Court of Cassation establishes a new requirement of legal standing, excluding creditors from seeking the appointment of a provisional administrator. This strict position marks a break from earlier case law and raises numerous practical uncertainties, particularly for “atypical” creditors such as bondholders, employees, or dismissed directors. A prompt clarification of the scope of eligible applicants is now urgently needed.
Cabinet BRAHIN, Advokatfirma i NICE, Lawyers in NICE
Camilla Nissen MICHELIS
E-mail : camilla.nissen.michelis@brahin-avocats.com
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
