Anofficer in a company transferred, for no consideration, all of the company's business activity to other companies incorporated for that purpose, while increasing its own debts, all without any commercial logic and knowing that the company is insolvent and without any chance of rehabilitation.
The Court accepted the liquidation trustee's contention and determined that the company was indeed fraudulently managed and that the office should personally bear its damage. A company will be deemed to have been fraudulently managed when it continued to increase the scope of its debts while its managers knew that it was insolvent and its creditors would not be able to receive their money or when an officer acted over time and through a series of acts to manage the company in a fraudulent manner. Here, an officer knew that it was impossible to continue and operate or rehabilitate the company and yet created additional obligations and debts to the company’s detriment while at the same time transferred, for no consideration, the company's activity and rights to use its assets, to companies under his management. This conduct constitutes fraudulent management and therefore he must bear the damage caused to the company due to this conduct.