By its decision of May 27, 2005, the Regional Court Düsseldorf found that former managing directors of Messe Düsseldorf do not bear personal liability for losses of the company incurred during the financial year. The claim against the former board members was therefore dismissed (Case No.: 39 O 73/04).
Background of the proceedings
The judgment was based on a claim filed by Messe Düsseldorf as a company against its former managing directors. The company sought significant damages, which it asserted in connection with balance sheet losses from the period in question. In the company’s opinion, the former managing directors had breached their duties as board members of the management and thereby caused financial loss.
Examination of board liability
The main issue was whether, in this specific case, liability of the former managing directors under Section 43 (2) GmbHG should be affirmed. The court examined the duty of care required of a managing director, including obligations regarding control, monitoring, and the necessity to take appropriate steps to avoid harm to the company’s assets. The tasks of a managing director include managing the company according to proper business practice and protecting the company’s assets.
Decision of the Regional Court Düsseldorf
The Regional Court denied any breach of duty by the former managing directors. It could not be established that they had breached their duties of care in connection with the business losses shown in the financial statements or had failed to take required actions. In the court’s view, the actions of the board members were covered by entrepreneurial discretion (the so-called “business judgment rule”). Furthermore, the court saw no concrete indications that would have established personal liability. The claim was therefore dismissed.
Significance of the judgment for board members of corporations
The decision underscores that not every adverse financial development or balance sheet loss automatically results in management liability. There must always be a demonstrable breach of duty with a measurable resultant loss. Courts regularly carry out a differentiated review of the relevant circumstances and the duties of care.
It is advisable for companies and board members to continuously review and document internal structures and decision-making processes in line with statutory requirements to specifically counter potential liability risks.
For further legal questions relating to board liability and responsibilities in company law, the team at MTR Legal will be happy to assist you. Further information is available at Legal advice on company law.
