Member Vetting Process
Log In
About
Members
News
Awards
Contact
Member Vetting Process
Log In
Log In
Member Search
Specialism
Law Firm
Advisory Firm
Country
Afghanistan
Albania
Algeria
Angola
Anguilla
Antigua and Barbuda
Argentina
Armenia
Aruba
Australia
Austria
Azerbaijan
Bahamas
Bahrain
Bangladesh
Barbados
Belgium
Bermuda
Bolivia
Bosnia and Herzegovina
Botswana
Brazil
British Virgin Islands
Bulgaria
Cameroon
Canada
Cayman Islands
Chile
China
Colombia
Costa Rica
Croatia
Cyprus
Czech Republic
Denmark
Dominican Republic
Egypt
El Salvador
Estonia
Finland
France
Germany
Ghana
Gibraltar
Greece
Guatemala
Hong Kong
Hungary
Iceland
India
Indonesia
Iran
Israel
Italy
Japan
Jersey
Kenya
Korea (South)
Kosovo
Kuwait
Lebanon
Liechtenstein
Luxembourg
Macau
Macedonia
Madagascar
Malaysia
Malta
Mauritania
Mauritius
Mexico
Monaco
Morocco
Netherlands
New Zealand
Nicaragua
Nigeria
Norway
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Republic of Ireland
Romania
Russia
Saint Kitts and Nevis
Saint Lucia
Saudi Arabia
Senegal
Serbia
Seychelles
Singapore
Slovakia
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
Taiwan
Tanzania
Thailand
Togo
Trinidad and Tobago
Tunisia
Turkey
Turks and Caicos Islands
UAE
Uganda
UK
Ukraine
Uruguay
US Virgin Islands
USA
Vietnam
Zimbabwe
Practice Area
Accountancy
Administrative
Admiralty
Advertising
Agribusiness
AI
Alternative Dispute Resolution
Alternative Finance
Arbitration
Art
Asset Protection
Asset Protection Structures
Audit & Finance
Aviation
Banking & Finance
Bankruptcy
Broker Risk Management
Business
Business Formation
Capital Markets
Citizenship
Civil
Civil Litigation
Civil Rights
Commercial
Commercial Arbitration
Commercial Contracts
Commercial Leasing
Commercial Litigation
Commercial Litigation
Commercial Real Estate
Commodities Trading
Commodity Disputes
Company
Company Formation
Competition
Compliance
Compliance & Regulatory
Construction
Contentious Probate
Contract
Copyright
Corporate
Corporate Criminal
Corporate Finance
Corporate Governance
Corporate Immigration
Corporate Restructuring
Corporate Risk Management
Corporate Support Services
Corporate Tax
Costs
Criminal
Criminal Defence
Cross Border Estates
Cross-Border
Cross-Border Transactions
Cultural Property
Customs Advisory
Data & Innovation
Data Protection
Debt Collection
Debt Recovery
Defence & Security Procurement
Dispute Resolution
Divorce
Due Diligence
Economic Criminal
Employment
Employment Litigation
Energy
Energy & Natural Resources
Environmental
ERISA & Employment Benefits
Estate Planning
European
Family
Fiduciary
Financial Services
Financial Services & Regulatory
Financial Transactions
FinTech
Fiscal
Foreign Direct Investments
Foreign Investments
Franchise
Full Service
Gaming
Health & Safety
Healthcare
Healthcare M&A
Human Rights & Labour Rights
Immigration
India Desk
Industrial Relations
Information Technology
Infrastructure
Inheritance
Insolvency
Insurance
Insurance & Reinsurance
Insurance Litigation
Intellectual Property
International Arbitration
International Business
International Corporate
International Debt Collection
International Franchise
International Fraud
International Litigation
International Private
International Real Estate
International Tax
International Tax Planning
International Trade
International Trade & National Security
Investigations
Investment
IP Litigation
IT
Joint Ventures
Labour & Employment
Leasehold Enfranchisement
Legal Malpractice
Legal Risk Management
Life Science Patent
Life Sciences
Litigation
Litigation & Arbitration
M&A
Maritime
Matrimonial
Media & Entertainment
Mediation
Medical Malpractice
Mining
Neuroradiology Expert Witness
New Technologies
Oil & Gas
Orthopaedic Expert Witness
Patent Litigation
Patents
Personal Injury
Personal Injury - Plaintiff
Pharmaceuticals & Life Sciences
Private Client
Private Equity
Private Funds
Probate & Inheritance
Project
Project Finance
Property
Public Procurement
Real Estate
Real Estate - Property
Regulatory
Renewable Energy
Restructuring
SaaS/PaaS
Securities
Securities Litigation
Shipping & Admiralty
Shipping & Maritime
Shipping Finance
Sports
Start Up
Tax
Tax Litigation
Tax Planning
Tax Relocation
Tax Structures
Technology
TMT
Trademark
Transaction
Transportation
Trust & Estates
Trust Administration
Venture Capital
Wealth & Estate Planning
Wealth Management
Wealth Planning
Whistleblower
White Collar Crime
Workers Compensation
GRP Rainer Rechtsanwälte – Report on insolvency and liability of managing directors
Published: Wednesday, May 29, 2019
A managing director’s obligations include filing for insolvency on behalf of the company in a timely manner. He or she may be held personally liable for failing to fulfil this obligation.
Managing directors who fail to fulfil their obligations may be held personally liable as a result. A managing director’s obligations include filing for insolvency in due time if the company is insolvent or over-indebted. We at the commercial law firm GRP Rainer Rechtsanwälte can report that it is often difficult to accept the onset of a company’s insolvency. In many cases, there is also frequently a lack of clarity surrounding the latest point in time by when one needs to have filed for insolvency.
We at GRP Rainer Rechtsanwälte note that it is necessary to file for insolvency without undue delay, but no later than three weeks after the company becomes insolvent or over-indebted. A company is deemed to be over-indebted if its assets no longer cover its existing liabilities. Moreover, there is a presumption of insolvency if the company is no longer able to settle the bulk of its liabilities. While this means that the company is to some extent still in a position to make payments, it also represents a risk to managing directors; payments can only continue to be made insofar as they do not diminish the insolvency estate.
During difficult economic times, companies understandably want to continue paying wages to their employees for as long as possible, but they would do well to proceed with caution. Following the onset of insolvency, further payments are only allowed if the consideration in return for the payment offsets the reduction in the value of the insolvency estate. In ruling from July 4, 2017, the Bundesgerichtshof, Germany’s Federal Supreme Court, held that the consideration intended to form part of the insolvency estate needs to be capable of being used by the creditors (Az.: II ZR 319/15). The Court went on to note, however, that services and wages are generally not suitable for this purpose. This means that if in these kinds of cases the managing director nevertheless arranges for the payment of service providers or the remittance of wages and salaries, he or she may be personally liable to make restitution.
Due to the substantial risk of personally liability they face, it is imperative that managing directors do not ignore the signs of imminent insolvency but instead proceed with caution. Lawyers who are experienced in the field of company law can offer professional advice in these kinds of crisis situations.
https://www.grprainer.com/en/legal-advice/company-law/restructuring-insolvency.html
Share on Facebook
Share on Twitter
Share on LinkedIn
Member Introduction
Ted Scott
Secretariat International, Inc.
California, USA
View Profile
Olga Torres
Torres Trade Law, PLLC
Washington DC, USA
View Profile
Clifford Cohn
Cohn & Associates
Pennsylvania, USA
View Profile
Adrienne Braumiller
Braumiller Law Group
Texas, USA
View Profile
The Lawyer Network in numbers
0
+
Members Firms
0
+
Countries
0
+
Practice Areas
0
+
Member Firms
Total Staff