Economic offence
Punishable insolvency defence lawyer
Arts. 259-261 bis Criminal Code
Punishable insolvency punishes a debtor who, through disposals of assets or fraudulent transactions, causes or worsens their state of insolvency to the detriment of creditors. It is an offence that frequently arises alongside insolvency proceedings, particularly where the culpability report identifies indications of wilful or grossly negligent conduct by the director.
Drawing the line between poor business management — which is not a criminal offence — and fraudulent insolvency is the issue that decides most of these cases: it is not enough for the company to have failed; it must be shown that the debtor acted with the intention of deliberately harming its creditors.
For the director of a struggling company, the line between poor management and punishable insolvency can decide whether they keep their personal assets or not.
Scope of work
- Defence of directors in the insolvency proceedings' culpability report
- Defence in criminal proceedings for punishable insolvency
- Analysis of asset disposals made before the insolvency and their justification
- Coordination between the insolvency proceedings and the criminal case
When to call
- Your company is subject to insolvency proceedings and the culpability report may go against you
- You carried out asset transactions before an insolvency that are now being questioned
- A creditor accuses you of having concealed or diverted assets
Frequently asked questions
Is every business failure a criminal offence?
No. Punishable insolvency requires an intentional element or gross negligence aimed at harming creditors; insolvency arising from market conditions, without fraudulent conduct by the debtor, is not a criminal offence, however severe its financial consequences.
What is a culpable classification of the insolvency proceedings?
It is the stage of insolvency proceedings in which it is determined whether the insolvency was caused or worsened by wilful misconduct or gross negligence on the part of the debtor or its directors; a culpable classification does not automatically amount to a criminal offence, but it is usually the precursor that leads to criminal proceedings.
Does filing for insolvency late have criminal consequences?
It can, if the delay is used to keep incurring obligations known to be unpayable, or to carry out transactions that worsen the insolvency to the detriment of creditors. The timing and the reason for the delay are, again, the key issues.