Legal Updates

Failure to review potential debts prior to commencement of voluntary liquidation of a company will create personal liability for managers

June 20, 2018

A travel agency was ordered to pay severance pay and social rights to an employee.  Before the Court verdict was given, the company entered voluntary liquidation proceedings and the employee sought to personally obligate the directors and the liquidator of the company.

The Court accepted the claim and held that a director who signed a solvency affidavit as part of a voluntary liquidation of a company is personally liable if acted negligently or in the lack of good faith. For example, a director who disregarded creditors and potential damaged parties and gave a statement of solvency may be held liable. In this matter, the directors did not examine the existence of possible creditors and the liquidator relied on information received from the company without examining it personally and therefore both are personally liable for debt to the employee.