Introduction: The Importance of Managing Director Liability in the Context of the GmbH
The question of liability for managing directors of a limited liability company (GmbH) is a central issue in German corporate law. In particular, the regulation of § 64 GmbH Act (now § 15b InsO) repeatedly comes into focus in both judicial and business considerations. This provision sets out the conditions under which managing directors of a GmbH can be held personally liable if, after the onset of insolvency or over-indebtedness, payments are made to third parties. Ongoing case law continually broadens the scope of liability risks – not least with the landmark ruling of the Higher Regional Court (OLG) Düsseldorf dated July 23, 2018 (Ref. I-4 U 93/16).
Legal Framework: § 64 GmbHG and Its Purpose
Clarification of Liability Principles
§ 64 GmbHG (now § 15b InsO) aims to protect company assets in the interest of creditors as soon as the company becomes insolvent. If the GmbH becomes insolvent or over-indebted, payments made from that point onwards become particularly relevant in terms of liability.
The governing bodies, in particular the managing directors, are no longer permitted from this point onwards to initiate payments that are not in accordance with the diligence of a prudent business manager. Otherwise, they are obligated to reimburse these disbursements to the company—a liability which, in view of creditor protection, carries far-reaching consequences.
Abstract and Concrete Liability Risks
The provision does not create a claim in favor of individual creditors, but rather gives rise to a claim of the company or, subsequently, of the insolvency administrator against the management bodies. In the event of insolvency, this claim often serves the interests of the collective body of creditors.
The OLG Düsseldorf Ruling: New Accents in Jurisprudence
Background and Procedural History
The landmark ruling of the OLG Düsseldorf (Ref.: I-4 U 93/16) concerned a managing director who continued to pay out company funds to third parties after the company became insolvent. The insolvency administrator sought restitution of these payments through legal action. The central question of the proceedings was how far liability under § 64 GmbHG extends and what requirements must be met for exculpatory evidence or exceptional circumstances.
Key Statements and Doctrinal Determinations
The OLG Düsseldorf confirmed the existing strict interpretation of managing director liability:
- After the occurrence of insolvency maturity, all payments to third parties are, in principle, grounds for liability, unless an exception applies.
- The managing director bears the burden of proof that a payment was consistent with the diligence of a prudent business manager or that an exceptional circumstance (e.g., within the scope of safeguarding the insolvency estate) exists.
- The court emphasized that, fundamentally, only such disbursements are exempt from liability which serve to guarantee the estate or are made in the course of proper preparation for an insolvency petition.
Distinction of Privileged Payments
The judgment underscores that purely ‘estate-neutral’ or even ‘estate-increasing’ payments remain permissible, provided they immediately and without delay preserve the estate (for example, settling a supplier’s invoice where the supplier promises a new delivery in exchange for payment). All other payments must be critically scrutinized and carry the risk of liability.
Implications for Company Management Practice
Greater Accountability and Heightened Review Requirements
With its decision, the OLG Düsseldorf sets a clear framework for management: Even at the first signs of a financial crisis within the GmbH, those responsible are required to establish a tailored control system and continuously monitor whether insolvency maturity has occurred. The actual and legal prerequisites for each payment must be reviewed without delay and carefully documented.
Relevance of Evidence and Documentation
The decision further clarifies that management bodies bear an increased burden of proof, especially when invoking exceptional circumstances. Meeting this obligation is often labor-intensive in court proceedings and requires detailed records of all payment transactions, their justification, and purpose.
Insolvency Administrators as Claimants
After insolvency proceedings are opened, insolvency administrators frequently assume the rights of the company and pursue claims for compensation rigorously, which further increases the practical relevance of this liability.
Classification and Current Developments
Relationship to Other Corporate Liability Provisions
§ 64 GmbHG (now § 15b InsO) must be viewed in the context of other civil and criminal liability risks for management. These include, for example, liability under § 43 (2) GmbHG in cases of intentional breach of duty or general tortious acts. In practice, a business crisis may give rise to numerous and sometimes parallel bases for legal claims.
European and International Perspectives
The issue is also gaining significance in cross-border scenarios—not least in the context of internationally operating corporate groups and subsidiaries. National liability provisions like § 64 GmbHG are increasingly subject to nuanced interpretation, especially in light of the harmonization of European insolvency law.
Conclusion and Outlook
The OLG Düsseldorf ruling has further heightened the standards for assessing managing director liability for GmbHs after the onset of insolvency and especially clarifies the high duty of care and the obligation to exercise restraint with regard to disbursements from company funds. The case law calls for a prudent and well-documented approach to enable exoneration of the management.
In light of the complexity and liability-laden scenarios, it is advisable to seek professional advice in cases of uncertainty regarding the scope of corporate responsibility or impending financial crisis in the company. For any questions regarding managing director liability and interpretations of current case law, the lawyers at MTR Legal are gladly at your disposal.
