Can a stock corporation reclaim from its former management board a fine imposed on the company if, through a breach of duty, that board caused the company’s administrative offence? The Oberlandesgericht Frankfurt am Main (OLG Frankfurt, Higher Regional Court of Frankfurt am Main) answered this question in principle in the affirmative in its judgment of 21 October 2025 – Case No. 31 U 3/25.
The decision concerns a conflict that is central to corporate practice: on the one hand, corporate fines are intended to encourage companies to act lawfully and to sanction them for organisational and supervisory deficiencies. On the other hand, stock corporation law obliges management board members to compensate the company for losses caused by a culpable breach of their duties as corporate officers.
The OLG Frankfurt places civil-law directors’ and officers’ liability in the foreground. In the Senate’s view, neither the sanctioning purpose of the fine nor the possibility of sanctioning both the company and the responsible corporate officer generally precludes a corporate-law recourse claim. The decision is therefore of considerable importance for compliance practice, the liability of corporate officers and dealings with D&O insurance.
Missing balance sheet oath leads to a BaFin fine
The proceedings were based on the publication of an incomplete half-yearly financial report.
The claimant, a listed stock corporation, published its half-yearly financial report for the first half of 2018 on 16 August 2018. The report did not contain a balance sheet and management report oath, the so-called Bilanzeid.
Under § 115 Abs. 2 WpHG (German Securities Trading Act) in conjunction with the relevant provisions of commercial law, such a declaration forms part of the legally prescribed content of the half-yearly financial report. Among other things, the declaration serves to protect investor confidence in the accuracy and completeness of the published financial information.
Suspicion of an administrative offence
The defendant was the company’s sole management board member during the relevant period. In June 2021, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority) informed the company that, due to the missing balance sheet oath, it was examining the suspicion of an administrative offence under § 120 Abs. 12 Nr. 5 WpHG. The authority indicated that a fine of EUR 900,000 was possible.
The company informed its former management board member about the hearing procedure that had been initiated and requested him to comment on the allegation and to help avert the threatened fine. The defendant did not respond.
The company then obtained legal advice and negotiated with BaFin. As a result, the fine was reduced to EUR 290,000. The precondition was that the company waived its right to appeal.
By notice dated 15 November 2021, BaFin imposed the fine in the amount of EUR 290,000. Fees of EUR 7,500 and expenses of EUR 3.50 were added. The company paid a total of EUR 297,503.50.
Company claims damages from management board member
It subsequently brought a claim for damages against its former management board member. In addition to the fine, including fees and expenses, it sought reimbursement of the legal advisory costs incurred in connection with the fine proceedings.
The former management board member opposed the recourse claim. In particular, he argued that a fine imposed on the company could not be shifted to the responsible corporate officer. Otherwise, the purpose of the corporate fine would be undermined, since it was precisely intended to affect the company’s assets.
In addition, he denied a culpable breach of duty and disputed the causal link between his conduct and the amount of the fine actually imposed.
LG Frankfurt upheld the claim
The Landgericht Frankfurt am Main (LG Frankfurt, Regional Court of Frankfurt am Main) largely upheld the claim by judgment of 30 June 2023 (Case No. 3-14 O 2/23). It ordered the defendant to pay EUR 310,408.50 plus interest. The defendant appealed.
OLG Frankfurt largely dismisses the appeal
By judgment of 21 October 2025, the OLG Frankfurt largely dismissed the appeal brought by the former management board member.
It confirmed the company’s claim for reimbursement of the fine imposed on it, including the administrative fees and expenses, in a total amount of EUR 297,503.50. It also confirmed that the necessary legal enforcement costs were, in principle, recoverable.
The Senate amended the first-instance decision only with regard to the accrual of interest. Interest of five percentage points above the applicable base interest rate on an amount of EUR 306,363.50 was payable only from 5 April 2022.
The defendant also had to bear the costs of the appeal proceedings. The amount in dispute for the appellate instance was set at EUR 310,408.50.
Of particular importance is that the court allowed an appeal on points of law. The decision is therefore not to be understood as a final clarification by the highest court of all questions relating to recourse for fines.
The appeal on points of law is pending before the Bundesgerichtshof (BGH, Federal Court of Justice) under Case No. II ZR 163/25.
Breach of duty by a corporate officer and fault
The starting point of the decision is § 93 Abs. 1 Satz 1 AktG (German Stock Corporation Act). Under this provision, management board members must apply the diligence of a prudent and conscientious manager in managing the company. In the event of a culpable breach of duty, they are liable to the company under § 93 Abs. 2 Satz 1 AktG for compensation for the resulting loss.
In the view of the OLG Frankfurt, the defendant had breached these duties by failing to provide the legally prescribed balance sheet oath in the half-yearly financial report.
Strictly personal duty of the management board
The Senate emphasised that giving the balance sheet oath is a strictly personal duty of the management board member. By making the declaration, the corporate officer expresses that, after his own careful review, he considers the half-yearly financial report to be compliant with the law.
Responsibility for this cannot be fully transferred to other persons or organisations.
The defendant therefore could not successfully rely on the fact that several departments of the company, a company commissioned to prepare the report, the auditing firm and the supervisory board had likewise failed to notice the absence of the balance sheet oath.
Even an internal control system that generally functions does not release a management board member from performing a duty expressly assigned to him personally.
Boundary between delegation and responsibility
The judgment thus underlines the limits of delegating responsibility: corporate officers may allocate tasks organisationally and obtain specialist support. However, responsibility for strictly personal statutory duties remains unaffected.
Negligence and burden of proof
The OLG Frankfurt also affirmed the required fault.
Under § 93 Abs. 2 Satz 2 AktG, the management board member bears the burden of pleading and proving that he applied the required diligence. In the specific case, the Senate saw no sufficient circumstances capable of refuting the allegation of negligence.
The defendant had not personally checked the half-yearly financial report for completeness. Precisely because the balance sheet oath is an essential component of the report and must be given personally by the responsible corporate officer, the court held that this approach did not satisfy the statutory standard of care.
The decision makes clear that the mere existence of control mechanisms is not sufficient. What is also decisive is whether the management board member actually performs the tasks incumbent on him personally and carries out the necessary checks in an appropriate manner.
Causation between breach of duty and fine
Another central issue concerned the connection between the breach of duty and the damage claimed.
The defendant argued that, through its negotiations with BaFin, the company had itself influenced the amount of the fine. It therefore could not simply be assumed that the entire payment was attributable to his breach of duty.
The OLG Frankfurt did not follow this argument.
The company had substantiated its submission that BaFin had initially indicated a fine of EUR 900,000 and reduced it to EUR 290,000 only after negotiations accompanied by lawyers. In doing so, the company had referred, among other things, to its compliance system, the involvement of an auditing firm and the absence of any risk of repetition.
In the Senate’s view, the defendant had not challenged this submission with sufficient specificity. In particular, he had not set out sufficiently substantiated circumstances from which it would have followed that the authority would have imposed no fine or a lower fine in the absence of the breach of duty or in the event of a different course of proceedings.
The fact that the defendant himself had not been involved in the fine proceedings did not exonerate him. The company had informed him of the proceedings in good time and given him the opportunity to comment.
Corporate fines as recoverable damage
The focus of the judgment is the question of whether a fine imposed on the company can constitute damage recoverable by way of recourse within the meaning of § 93 Abs. 2 Satz 1 AktG.
The OLG Frankfurt answered this in the affirmative.
According to the wording of the provision, management board members must compensate the company for losses arising from a breach of duty. § 93 Abs. 2 Satz 1 AktG contains no express exception for fines.
In the Senate’s view, the legislative materials also provided no indication that corporate fines were generally intended to be excluded from the scope of directors’ and officers’ liability.
The Senate also relied on the purpose of directors’ and officers’ liability. This is intended, on the one hand, to compensate the company for financial disadvantages and, on the other, to promote conduct in accordance with duties through the threat of personal claims against corporate officers.
If a company is fined because of a culpable breach of duty by its management board, this may constitute a financial disadvantage which the corporate officer must compensate under the general rules of stock corporation law.
From this perspective, the fine is not excluded from damages merely because it originally constitutes a public-law sanction.
No general priority of the sanctioning purpose
The defendant had argued that passing the fine on to the responsible management board member would undermine the purpose of the sanction. The fine was precisely intended to affect the company and encourage it to act lawfully.
The OLG Frankfurt engaged in detail with this opposing view.
Although a state sanction must generally be borne by the addressee, it does not necessarily follow that a civil-law claim for compensation against a third party is excluded.
Separate consideration
In this respect, the Senate referred to case law of the highest courts, according to which public-law sanctioning and civil-law liability for the financial disadvantage thereby incurred must be considered separately.
What is decisive is whether a claim for compensation arises under the general provisions of civil law.
Nor does the fact that, under certain conditions, the legislator permits sanctions against both the company and the acting corporate officer automatically lead to the exclusion of corporate-law recourse.
A restrictive interpretation of § 93 Abs. 2 Satz 1 AktG by way of teleological reduction would require an unintended regulatory gap. The OLG Frankfurt did not identify such a gap.
Corporate-law directors’ and officers’ liability and the criminal or administrative-offence sanctioning system exist alongside one another as independent regulatory areas.
The Senate therefore saw no sufficient reason to generally exclude civil-law liability for corporate fines.
Significance of D&O insurance
The defendant had also argued that recourse in connection with D&O insurance could lead to an impermissible economic indemnification of the fine.
The court did not accept this objection as a general ground for exclusion.
It pointed out that, despite a possible recourse claim, a company is not necessarily fully relieved. D&O policies may contain limited sums insured, exclusions of liability and further restrictions. The personal financial capacity of the corporate officer may also limit the actual enforcement of the claim.
In addition, the recourse claim fulfils an independent function under corporate law: it enables the company to respond to a breach of duty by its management body and to assert the loss incurred.
However, it does not follow from this that D&O insurance automatically covers the fine itself. The question of whether, and to what extent, the insurer must respond to a recourse claim must be examined separately on the basis of the relevant insurance contract and the applicable provisions of insurance law.
Judgment strengthens the position of stock corporations
The decision strengthens the position of stock corporations that have been fined because of a culpable breach of duty by their management board.
According to the legal view of the OLG Frankfurt, a recourse claim is not excluded solely because the sanction was directed against the company and not against the corporate officer personally.
However, the general requirements of directors’ and officers’ liability remain decisive for assessing the claim. In particular, the company must plead a breach of duty, causally related damage and the further requirements of the damages claim. The statutory rules on the burden of proof must be observed.
The judgment does not result in automatic recourse against the corporate officer. Rather, in each individual case it must be examined whether the specific fine was in fact based on an attributable breach of duty by the corporate officer concerned.
Compliance systems must reflect personal duties of corporate officers
For management boards and supervisory boards, the decision makes clear that compliance systems must not merely exist organisationally. They must also ensure that statutory duties to be performed personally are reliably fulfilled.
Especially in the case of publication and reporting obligations under capital markets law, a clear allocation of responsibilities is advisable. In particular, robust approval processes, documented completeness checks and a clear determination of who must make legally prescribed declarations are required.
D&O insurance: assess coverage separately
For insurance-law practice, a distinction must be made between the existence of a recourse claim under corporate law and its insurability.
The judgment does not establish any general entitlement to have D&O insurance cover corporate fines or all recourse claims resulting from them.
Rather, the decisive factors are the specific policy terms, the insured breach of duty, possible exclusions and the question of which heads of damage are covered by the insurance.
Companies and corporate officers should therefore not limit the coordination of compliance structures, liability prevention and insurance coverage to the question of whether a D&O policy exists.
Assessment of the judgment
The judgment was handed down against the background of an issue of German company law and administrative-offence law that continues to be the subject of controversial debate.
The order of the Bundesgerichtshof of 11 February 2025 – KZR 74/23 is of particular importance. In those proceedings, the BGH referred a question concerning managing directors’ liability for cartel fines to the Europäischer Gerichtshof (ECJ, Court of Justice of the European Union).
The order shows that the limits of recourse for fines, particularly in competition law, remain subject to review by the highest courts. The question of the extent to which a company may pass on to a corporate officer a fine imposed on it cannot therefore be answered independently of the respective sanctioning regime.
The OLG Frankfurt bases its decision primarily on § 93 Abs. 2 Satz 1 AktG and the directors’ and officers’ liability regulated there. The specific case concerned a financial-supervisory fine due to a missing balance sheet oath in the half-yearly financial report.
The decision should therefore not be transferred without qualification to all corporate fines. In the case of cartel fines in particular, additional questions may arise due to European and national competition law.
It is also significant for the assessment that the OLG Frankfurt allowed an appeal on points of law. Until final clarification by the highest court, the scope of recourse for fines must therefore continue to be carefully examined with regard to other sanctioning regimes and differing factual constellations.
Considerable significance for directors’ and officers’ liability and compliance
With its judgment of 21 October 2025, the OLG Frankfurt strengthens the possibility of asserting corporate fines against responsible management board members by way of internal recourse under corporate law.
The Senate makes clear that a fine imposed on the company may, in principle, constitute a recoverable financial disadvantage. In the court’s view, the public-law purpose of the sanction does not generally preclude a civil-law claim for compensation.
In the specific case, the former sole management board member was liable because he had failed to provide the legally prescribed balance sheet oath in the half-yearly financial report. The personal nature of this duty could not be refuted either by the involvement of external service providers or by the existence of internal control structures.
For corporate practice, three key conclusions follow from this:
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First, statutory duties of corporate officers must be clearly allocated and effectively monitored.
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Second, companies should comprehensively document the course of official proceedings and the occurrence of potential damage.
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Third, corporate-law liability and insurance coverage must always be examined separately.
However, the decision is not yet to be understood as final clarification by the highest court. Since the OLG Frankfurt allowed an appeal on points of law, further developments in the case law remain to be awaited.
Critically review existing structures
For management boards, supervisory boards, companies and D&O insurers, the judgment is nevertheless already an important reason to critically review existing liability and compliance structures.
MTR Legal Rechtsanwälte advises companies, management board members and corporate officers as well as investors on corporate-law issues and in contentious shareholder constellations. Further information can be found at Legal advice in corporate law.
