Judgements

BGH judgement on managing director liability - subsequent liability of a departed managing director confirmed

Regensburg/Munich, 1 August 2024 - The law firm specialising in banking and capital market law Dr Greger & Collegen has achieved a significant success before the Federal Court of Justice (BGH).
In its recent judgement of 23 July 2024 (case no. II ZR 206/22), the BGH confirmed that a Former Managing Director pursuant to Section 823 (2) BGB in conjunction with. § 15a InsO also for damages from New believers The Executive Board member is liable for damages that only arose after his departure through the conclusion of contracts with the company - provided that the risk situation created by his breach of duty still existed at the time the damage occurred.

What was the BGH judgement about?

With this decision, the BGH clarified the Liability of former managing directors:

Responsibility does not end automatically when the employee leaves the company.
Breaches of duty continue to have an effect as long as they cause a risk situation for the company or its creditors.
New creditor are better protected, as they also have claims if they only conclude contracts with the company after the managing director has left the company.

Significance for managing directors and investors

This judgement is groundbreaking in practice:

Managing Director must expect liability even after their cancellation if they have previously breached their obligations.
Investors and creditors receive more legal certainty and can also assert claims against former managing directors.
Case law strengthens investor protection in capital investment models and insolvency cases.

Assessment by Dr Stephan Greger

"We are proud to have won this landmark judgement," explains Dr Stephan GregerSpecialist lawyer for banking and capital market law.
"The BGH's decision creates more clarity and certainty for all parties involved. It ensures that managing directors must take their responsibility seriously - even beyond their term of office."

The decided case

The law firm represented a plaintiff who made investments in a capital investment model after the former managing director had already resigned from office, but had previously violated his obligation to file for insolvency.

The BGH followed Dr Greger's reasoning:
A managing director is also liable for Contracts concluded at a later dateas long as the hazardous situation caused by him continues to exist.

Dr Greger comments:
"A managing director cannot avoid liability by giving up his position and abandoning the sinking ship in a crisis situation."

Conclusion: More legal certainty thanks to the BGH judgement

In its judgement of 23 July 2024, the BGH has Subsequent liability of departing managing directors confirmed. This means for investors and creditors:

More protection against breaches of duty in crisis situations.
Claim for damages even after the departure of a managing director.
Strengthening legal certainty in insolvency and capital market law.

FAQ

Is a managing director liable even after leaving the company?

Yes, according to the current BGH ruling (case no. II ZR 206/22 of 23 July 2024), a former managing director can continue to be liable if his previous breaches of duty still cause a risk situation for creditors or investors.

What does extended liability mean for managing directors?

Subsequent liability means that a managing director remains liable for certain damages even after leaving office if these are attributable to breaches of duty during his term of office.

What is the significance of the current BGH judgement?

The judgement strengthens the rights of investors and creditors. It clarifies that a managing director cannot end his liability by resigning or leaving the company as long as his breaches of duty continue to cause damage.

Question 4: Who benefits from the BGH ruling?

In particular, new creditors and investors who have concluded contracts with the company after the departure of a managing director will benefit from the extended liability option.