Recognition of the works council as supervisor of a liquidation

The situation

A company belonging to a French group whose business is the production and international sale of equipment for electricity networks and for the distribution of water and gas was placed in compulsory liquidation. The elected members of the works council instructed us to defend their interests in those proceedings and, more particularly, to obtain the appointment of the council as supervisor. That application met with the combined opposition of the court-appointed liquidator and of the director of the company in liquidation.

The difficulty

The office of supervisor carries a right of oversight over the conduct of the liquidation and direct access to information on the steps taken by the liquidator. Securing the appointment therefore meant giving the employee representatives the means to follow the proceedings from within rather than to depend on them entirely. The simultaneous opposition of the liquidator and of the director, both of them central to the proceedings, added to the difficulty, since persuading the court required showing that the council was entitled to hold the office notwithstanding that twofold resistance.

Our involvement

We brought the application before the Commercial Court of Paris, arguing that the elected members were entitled to hold the office of supervisor notwithstanding the reservations of the court-appointed liquidator and of the director. The court granted the application. The employee representatives obtained the office of supervisor and, with it, a direct right of oversight over the conduct of the liquidation, where their position might otherwise have been confined to that of mere observers.