The Nantes Administrative Court of Appeals decided on 9 February 1994 that the discharge of debt granted by a mother company to its subsidiary - in order to allow its sale to third parties on good conditions and to avoid its liquidation - was normal as long as the subsidiary had been sold at "the right price", notwithstanding that the operation also had the effect of protecting an executive that had personally guaranteed the debts of the subsidiary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. For additional information contact Claire Acard on 33/(1)/55 61 10 10. The members of Archibald Andersen Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar and the Lyon Bar.
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