Judgements

Successful judgement by the Federal Court of Justice: Law firm Dr Greger & Collegen obtains fundamental judgement on the subsequent liability of a retired managing director

Regensburg/Munich, 1 August 2024 - The renowned law firm Dr Greger & Collegen, which specialises in banking and capital market law, has achieved a significant success before the German Federal Court of Justice (BGH). In its recent judgement of 23 July 2024 (case no. II ZR 206/22), the BGH confirmed that a managing director who has left office is also liable for damages pursuant to Section 823 (2) BGB in conjunction with Section 15a InsO. §Section 15a InsO, a managing director who has left office is also liable for damages to new creditors 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 exists at the time the damage arose.

This judgement is highly relevant as it further clarifies the liability of managing directors in the event of insolvency challenges and strengthens the protective rights of new creditors/investors. The BGH has ruled that the liability of a managing director does not end when he leaves the company, but can continue to have an effect afterwards if his previous breach of duty continues to pose a risk to the company and its creditors.

"We are proud to have obtained this landmark judgement," says Dr Stephan Greger, owner of the law firm. "The decision of the BGH creates more clarity and certainty for all parties involved and ensures that managing directors must take their responsibility seriously - also with regard to liability beyond their term of office."

In this case, we represented a plaintiff who made investments in a capital investment model intended for a large number of investors after the former managing director had breached his duty to file for insolvency and had already resigned as managing director. In its recent judgement, the BGH followed its argument that the liability of the former managing director also applies to subsequent contracts concluded after his departure as long as the risk situation caused by him still exists. "A managing director cannot avoid liability by giving up his position as managing director and leaving the sinking ship in a crisis situation," says Dr Stephan Greger, a specialist lawyer for banking and capital markets law.

For further information or queries, please contact Dr Greger & Collegen.