# Liability of Former Managing Directors for Delayed Insolvency Filing > A managing director may remain liable for delayed insolvency filing after leaving office. BGH judgment of 8 July 2025 (II ZR 165/23). Source: https://www.mtrlegal.com/en/liability-former-managing-directors-delayed-insolvency-filing/ · Language: en · Updated: 2026-10-25 --- When must a managing director file for insolvency? And can he or she still be liable for losses that arise only after leaving office? The Bundesgerichtshof (BGH, Federal Court of Justice) addressed these questions in its judgment of 8 July 2025 (case no. II ZR 165/23). The decision clarifies the requirements for personal liability for delayed filing for insolvency and shows that a change in management does not necessarily end a risk situation that has already been created. ## Failed capital investments The legal dispute was based on several investment agreements concerning investments in sea freight containers. The claimant had concluded a total of nine agreements with various sales companies belonging to a corporate group that advertised container investments. The later deceased was managing director of a total of four companies in this corporate group between February 2013 and July 2016. After his removal, another managing director in each case took over the management of the companies concerned. The investor concluded six of his agreements between May 2013 and November 2015, i.e. during the later deceased’s term of office. Three further agreements were concluded only after he had left the management. In March and April 2018, the sales companies filed insolvency petitions. On 24 July 2018, the insolvency proceedings were opened on the grounds of illiquidity and over-indebtedness. The former managing director had already died on 13 June 2018. ## Investor claims damages The investor brought a damages claim against his sole heir. He based his claims, among other things, on a breach of the duty to file for insolvency pursuant to § 823 para. 2 BGB (German Civil Code) in conjunction with § 15a InsO (German Insolvency Code), and on intentional immoral damage pursuant to § 826 BGB. The Landgericht München I (Munich I Regional Court) partially upheld the claim. The Oberlandesgericht München (Munich Higher Regional Court) essentially confirmed liability for delayed filing for insolvency for the agreements concluded during the managing director’s term of office. By contrast, it denied corresponding liability for the agreements concluded later. It held that the former managing director’s duty to file for insolvency had also ceased when his position as a corporate officer ended. Both parties appealed on points of law. ## Decision of the BGH The Bundesgerichtshof set aside the appellate judgment and remitted the case to the Oberlandesgericht for a new hearing and decision. The central question was whether a former managing director can be liable for losses arising from investment agreements that were concluded only after he had left office. The BGH made clear that such liability is not excluded solely because the managing director concerned was no longer in office at the time the agreement was concluded. Rather, the decisive issue is whether the risk situation created by his conduct still existed when the later agreements were concluded and whether the loss asserted is covered by the protective purpose of the breached provision. The mere lapse of time between the end of the corporate officer position and the later conclusion of the agreement is generally not sufficient to interrupt the chain of attribution. In doing so, the Second Civil Senate continues its leading decision of 23 July 2024 (case no. II ZR 206/22), in which it had already affirmed the liability of former managing directors for losses suffered by new creditors where a risk situation caused by delayed filing continued to have effect. However, this does not mean that former managing directors are subject to liability without any time limit. Rather, the BGH emphasises the need for an evaluative assessment of the specific individual case. For liability under § 826 BGB, the decisive factor here was that the managing director had set up or operated a Ponzi scheme. ## Continuing risk situation and duty to file for insolvency Under § 15a InsO, the legal representatives of a legal entity must file for insolvency in due time when a ground for insolvency arises. The provision does not only serve to protect the company’s assets. It is also intended to prevent companies that are ready for insolvency from continuing to participate in business transactions and thereby endangering new creditors. The BGH emphasises that the duty to file for insolvency is intended in particular to protect creditors from the consequences of continued business operations despite insolvency maturity. If a company that is ready for insolvency continues to conclude contracts, new creditors may make dispositions of assets without being able to accurately assess the company’s financial situation. Liability for delayed filing for insolvency is intended to prevent such losses. ## Leaving office does not necessarily end attribution of liability It is true that the corporate officer’s duty to file for insolvency generally ends when the corporate officer position ends. However, it does not automatically follow from this that all civil liability for losses occurring later also ceases. In this respect, the BGH distinguishes between the corporate officer’s duty to file and the question of whether earlier conduct in breach of duty continues to be causative of a later loss. If the former managing director created a risk situation that still exists when the later agreement is concluded, the resulting loss may continue to be attributed to him. A successor managing director may indeed be under a duty to file for insolvency in due time. However, his possible breach of duty does not automatically eliminate the responsibility of the former managing director. The situation is different, for example, if the company makes a sustained economic recovery after the former managing director leaves office and only later becomes ready for insolvency again. In that case, the originally created risk situation may have ended. Whether liability for later losses continues therefore depends on the specific circumstances. ## No unlimited liability for all risks At the same time, the BGH limits liability by reference to the protective purpose of the breached provision. Not every risk associated with the continuation of a business operation falls within the protective scope of the duty to file for insolvency. Rather, what matters are the specific risks that arise from the fact that a company that is ready for insolvency continues to participate in legal and commercial transactions. In the case decided, it was therefore not sufficient that the corporate group’s business model may have functioned only if sales activities were continued. For liability, it instead had to be established whether the asserted losses reflected precisely the risk against which § 15a InsO is intended to protect. The liability of a former managing director cannot be justified solely on the basis that his timely insolvency filing might have brought the entire business model to a standstill. ### When must a managing director file for insolvency? The decision provides an opportunity to recall the statutory requirements for the duty to file for insolvency. ### Grounds for insolvency: illiquidity and over-indebtedness Under § 15a para. 1 InsO, the members of the representative body of a legal entity must file for insolvency without culpable delay if illiquidity or over-indebtedness has occurred. **Illiquidity** exists pursuant to § 17 para. 2 InsO if the company is unable to meet its due payment obligations. A merely temporary payment bottleneck must be distinguished from actual illiquidity. In practice, liquidity planning, due liabilities and funds available at short notice are particularly relevant in this regard. **Over-indebtedness** is governed by § 19 InsO. It generally exists if the company’s assets no longer cover its existing liabilities, unless continuation of the company over the next twelve months is predominantly likely. In the assessment, the statutory requirements regarding the going-concern prognosis and asset valuation must be observed. Both grounds for insolvency are independent. The duty to file for insolvency may therefore arise solely on the basis of over-indebtedness, even if the company can still pay its current invoices. ### What deadlines apply? Under the current version of § 15a para. 1 InsO, the petition must be filed **without culpable delay**. The maximum periods are: - **Three weeks from the occurrence of illiquidity** - **Six weeks from the occurrence of over-indebtedness** These periods are not a general grace period during which a managing director may simply wait and see. Rather, the insolvency petition must generally be filed without undue delay. The maximum period may be exhausted only if there are justified prospects of sustainably eliminating the ground for insolvency within that time. In the case of illiquidity, the key issue is in particular whether there is a realistic prospect of closing the liquidity gap in time. In the case of over-indebtedness, the decisive question is whether the over-indebtedness can be sustainably eliminated. Mere hopes of restructuring, non-binding financing commitments or the prospect of future revenues are not automatically sufficient. The period begins when the respective ground for insolvency occurs. A managing director therefore cannot simply rely on having learned of the economic crisis only later. Within the scope of their management responsibility, corporate officers must obtain a sufficient overview of the company’s economic situation through appropriate information and control systems. **What are the consequences of a late insolvency filing?** A culpable breach of the duty to file for insolvency can have significant consequences. Under civil law, damages claims in particular may be considered. § 823 para. 2 BGB in conjunction with § 15a InsO may establish personal liability if the requirements of the respective claim are met. In the case of new creditors, the focus is in particular on losses arising from the fact that they conclude contracts in reliance on the company’s ability to do business, even though it is already ready for insolvency. In addition, where the statutory requirements are met, criminal consequences may arise under § 15a paras. 4 and 5 InsO. Further bases of liability must also be examined, particularly in connection with payments made after insolvency maturity has occurred. ## Practical consequences for managing directors and creditors The decision makes clear that managing directors must not merely observe economic crises, but must assess them legally in good time. As soon as there are concrete indications of illiquidity or over-indebtedness, reliable liquidity planning and a well-founded review of the insolvency law situation are required. The decision is also significant for departing managing directors. It is true that their corporate officer duty to file generally ends when their office ends. However, personal liability for losses arising from a previously created risk situation may continue. A mere change in management therefore does not offer secure protection against later damages claims. For injured creditors, the judgment opens up the possibility of examining claims against former managing directors in a differentiated manner. The decisive factors include, in particular, the point in time at which insolvency maturity occurred, the corporate officer position held at that time, the specific breach of duty, the continued existence of the risk situation created, and the connection between the breach of duty and the loss. ## Conclusion With its judgment of 8 July 2025, the BGH strengthens the importance of the duty to file for insolvency as an instrument of creditor protection. A managing director cannot free himself from all responsibility for losses occurring later simply by leaving office. At the same time, the decision does not establish unlimited subsequent liability. The decisive issue remains whether the loss asserted reflects precisely the risk that § 15a InsO is intended to prevent. For practice, this means that managing directors should immediately arrange for a reliable insolvency assessment at the first signs of an economic crisis and document its results. Creditors and their legal advisers should, when enforcing damages claims, also consider the responsibility of former corporate officers and examine whether a risk situation created by them continued to exist until the harmful contract was concluded. MTR Legal advises managing directors, management board members and senior officers on [legal advice in insolvency law](https://www.mtrlegal.com/rechtsberatung/gesellschaftsrecht/restrukturierung-insolvenz/).