Liability of Managing Directors upon Insolvency – Legal Foundations and Criteria for Late Filing
The obligation to file for insolvency is one of the central duties of the management of a limited liability company (GmbH). Upon the occurrence of insolvency, the managing director is required to file without delay. The filing obligation regulated in § 15a InsO represents a particularly far-reaching responsibility, the breach of which can lead to severe civil and criminal consequences. The following article provides an in-depth analysis of the underlying legal standards, relevant key decisions, and liability-related aspects in light of recent developments and practical challenges.
Insolvency: Over-indebtedness and Illiquidity as Triggers for the Filing Obligation
Two Facts: Illiquidity and Over-indebtedness
The law fundamentally distinguishes between illiquidity (§ 17 InsO) and over-indebtedness (§ 19 InsO) as triggers for the insolvency filing obligation in corporations. Illiquidity exists when the company is unable to meet its due payment obligations. Over-indebtedness requires a calculative excess of liabilities over assets, whereby the going concern prognosis also plays a decisive role in the over-indebtedness status.
The Deadline for Insolvency Filing and Its Strict Interpretation
From the moment insolvency arises, management generally has a maximum period of three weeks to file the judicial insolvency petition (§ 15a para. 1 sentence 2 InsO). The central standard is that within this period, after a dutiful assessment, no payment suspensions – not even partial ones – are permitted unless viable restructuring measures are identifiable. The deadline begins with positive knowledge of the insolvency or grossly negligent ignorance thereof. Case law interprets this deadline strictly: any extension beyond what is necessary can give rise to liability consequences. There is also no entitlement to the full lapse of the deadline once insolvency has objectively occurred.
Scope of Responsibility: Civil and Criminal Liability of the Managing Director
Civil Liability Scope under § 64 GmbHG a.F., § 15b InsO n.F.
Late filing or failure to file leads to increased managing director liability. According to the case law applicable until 2020 under § 64 GmbHG a.F. – and today under § 15b InsO – managing directors are personally liable for all payments made after the occurrence of insolvency. The purpose of this provision is to preserve the estate and ensure equitable creditor satisfaction. The risk shift to the managing director means that any payment made after insolvency is generally deemed causative of damage unless it was made with the goal of increasing or securing the estate.
Criminal Relevance: Delayed Filing of Insolvency under § 15a para. 4 InsO
The breach of the filing obligation is not only a civil liability-triggering offense but is also subject to criminal sanctions. Intentional and – depending on state law also negligent – delayed insolvency filing can be punished by imprisonment or fines. Especially relevant is that even attempts to exhaust restructuring options do not automatically extend the deadline; the managing director must always examine and document that a continuing-operations prognosis actually exists.
Risk Factors and Typical Sources of Error in Corporate Practice
Complexity of Prognostic Decisions
A frequent challenge for managing directors lies in legally secure assessments of the exact point when illiquidity or over-indebtedness objectively exists. Civil and criminal case law requires a high level of diligence, which entails continuous monitoring of the liquidity situation. Uncertainties may arise, for example, if short-term financing aids are promised but their realization is uncertain.
Errors in Assessing Restructuring Prospects
One of the most common reasons for late filing is an overly optimistic assessment of ongoing restructuring efforts. The temptation to continue business operations in the hope of saving the company creates significant liability risk. Case law requires that restructuring measures not only be planned but already sufficiently specified and earnestly initiated.
Importance of Accounting and Internal Control Systems
Incomplete or delayed accounting regularly complicates timely determination of insolvency. Functional controlling processes and active liquidity management are therefore not merely internal organizational duties but can be crucial for legally secure management decisions in critical situations.
Current Developments in Case Law and Legislation
Increased Requirements for Managing Directors in Group Structures
Recent case law has further specified the liability conditions, especially in the context of corporate group structures and multiple managing director models. Several managing directors bear an independent obligation to oversee insolvency; a “glance into the blue” or relying solely on the statements of other management bodies regularly does not suffice.
Effects of the COVID-19 pandemic and temporary exceptions
In response to the economic impacts of the COVID-19 pandemic, the legislator temporarily eased the obligation to file for insolvency. However, these special regulations have long since expired, so the strict provisions of the Insolvency Code apply again.
Conclusion and Outlook: Minimizing Liability Requires Profound Compliance
The liability risks associated with delayed insolvency filing are extensive and are further intensified by increasingly strict case law. For managing directors of companies, especially in the SME sector or with international linkages, early risk identification and ongoing legal review of the liquidity status are of central importance. Open legal questions related to the obligation to file for insolvency, expanded liabilities in complex shareholder structures, or uncertainties about the continuation prognosis require a nuanced analysis tailored to the individual company situation.
For further questions and clarification needs regarding the topic of “liability upon insolvency maturity,” MTR Legal Attorneys are at your disposal with profound expertise in the field of insolvency law. Contact details and more information can be found under the heading legal advice in insolvency law.
