Corporate law Doing business involves risks. Corporate law offers the necessary possibilities to exclude these risks as much as possible, but also the necessary pitfalls. Any entrepreneur can be confronted with a situation in which his liquidity or solvency is under pressure. Debtors may fail to pay or go bankrupt, shareholders may face conflicts of interest that they cannot resolve, causing decision-making processes to stagnate, directors may start exploiting competing activities, and so on.

Avoid high costs afterwards
Sometimes you cannot escape restructuring, restart, reorganization or liquidation yourself. However, these processes must take place in accordance with the law, articles of association and shareholders’ agreement. After all, under certain circumstances you can be held (and be!) Personally liable as a director. Here too, legal advice in advance can prevent high costs afterwards.

Personal liability of a director
It is not uncommon for a director of a company to be held liable in private by a creditor of that company. In most cases this will be when the company is no longer able to pay the creditor. Below is discussed which rules apply. The personal liability of a director in the event of bankruptcy due to the lack of adequate administration and / or the late filing of the annual accounts (exclusive claims of the receiver) will be discussed at a later date and elsewhere. The personal liability of a director for the acts and omissions of a company is partly due to the judgments’ Beklamel (HR 6 October 1989, NJ 1990, 286) and ‘Receiver – Roelofsen’ (ECLI: NL: PHR: 2006: AZ0758)

Recipient – Roelofsen ‘(ECLI: NL: PHR: 2006: AZ0758)
In this judgment, the Supreme Court ruled, among other things: remain of his claim.

With regard to this disadvantage, in addition to the liability of the company, depending on the circumstances of the specific case, there may also be a ground for liability of the person who acted as director (i) on behalf of the company or (ii) has accomplished or authorized it. that the company does not comply with its legal or contractual obligations. In both cases, it may generally only be assumed that the director has acted unlawfully towards the creditor of the company where he, partly in view of his obligation to perform a proper task as referred to in art. 2: 9 BW, a sufficiently serious reproach can be made (cf. HR February 18, 2000, no. C98 / 208, NJ 2000, 295). For the cases referred to under (i), the standard has been accepted in case law that the personal liability of the director of the company can be assumed if he knew or should reasonably understand when entering into commitments on behalf of the company that the company would not fulfill its obligations. and would not offer any recourse, except in circumstances to be invoked by the director on the basis of which the conclusion is justified that he cannot be personally blamed for the disadvantage. In the cases referred to under (ii), the director concerned may be held liable for damages of the creditor if his actions or omissions as a director towards the creditor are such negligent under the circumstances that he can be personally blamed for this. Such a serious accusation can in any case be the case if it is established that the director knew or should reasonably have understood that the conduct of the company brought about or permitted by him would result in the company’s failure to comply with its obligations and would also not offer any recourse for the damage resulting from this. However, other circumstances may also arise on the basis of which such serious reproach can be assumed.

Now [defendant] a defense aimed at that [the unlawfulness of the act accused; addition of the defendants], the court was allowed to include in its judgment the extent to which [defendant] knew or should reasonably have understood that the […] debts […] would remain unpaid. In the opinion of the Court of Appeal it is decided that, if the latter were not established, there could be no question of a sufficiently serious personal reproach against [defendant], because the actions accused of him implied that the fiscal unity was not or not fully complied with its legal obligations, but in the context of the assessment of his personal liability are not in itself sufficient to accept such serious personal reproach that his actions must be regarded as unlawful. The Court of Appeal apparently found the Receiver’s assertion that [defendant] “accepted” for leaving the assessments unpaid in this context too light (additional) accusation for assuming personal liability of [defendant]. Understood in this way, the judgment of the Court of Appeal does not testify to an incorrect interpretation of the law […].

“Therefore: a director can be liable in addition to the company, if, either

(i) it is stated and proven that that director had (objectified) knowledge that he could not compliance and not offering recourse, unless the driver demonstrates that he cannot be personally blamed, or
(ii) if it is alleged and proven that this driver can be personally blamed for serious reproach.

The limit of the cases under (i) (the Beklamel standard) and (ii) (the Recipient – Roelofsen standard) lies with the objectified science of the director of non-compliance and no redress to be asserted and proven by the plaintiff. ‘. The mere lack of a certain (healthy) liquidity position and / or a certain amount of equity cannot lead to directors’ liability. This requires additional circumstances that (together) result in serious personal blame. In the words of Hof Amsterdam (Amstel Maintenance B.V., ECLI: NL: GHAMS: 2012: BX8923):

“It follows from the Beklamel judgment that there is no question of an unlawful act by a director who enters into an agreement on behalf of the company, if he did not yet know or should have known that the company would not be able to comply or offer redress, but he did. already had to take serious account of that possibility. The circumstance that a company is in dire straits cannot automatically support the conclusion that the person who actually determined the course of affairs within the company is acting unlawfully towards its creditors by entering into new obligations on behalf of the company. This does not detract from the fact that, according to business economics views, it is justifiable that the moment a company has negative equity capital and an unhealthy liquidity position, the company is actually on the verge of insolvency, as – as the court understands – Wanders in a plea on appeal wanted to emphasize. The mere absence of a certain (healthy) liquidity position and / or a certain amount of equity cannot lead to “directors’ liability”. Decisive for this are the special circumstances of the case and not the few (current) business economic insights. This would amount to ignoring the exceptional nature of the personal liability of the person who bound the company by entering into obligations on its behalf. ”

And about the duty to provide evidence and the burden of proof, the Court states in this judgment:

“By attributing (partly) decisive significance to the answer to the question of whether there was a reasonable or realistic chance that [the creditor concerned] could be paid and by imposing an increased obligation on the part of [the director] in that regard. take, the court has assumed an incorrect standard. “

With regard to the “personal grave accusation”, since ECLI: NL: HR: 2008, BC4959 (see, inter alia, ECLI: NL: GHARL: 2014: 8423 and ECLI: NL: HR: 2014: 2627 and 2628):

“If a company fails to comply with an obligation or commits an unlawful act, the starting point is that the company alone is liable for any resulting damage. Under special circumstances, however, in addition to the liability of that company, there is also room for liability of a director of the company. In order to assume such liability, it is required that the director can be personally blamed for the prejudice. Thus, for assuming liability of a director in addition to the company, higher requirements apply than is generally the case. A high threshold for liability of a director towards a third party is justified by the fact that vis-à-vis the other party primarily there are actions of the company and by the social interest that directors are prevented from allowing their actions to be undesirably determined by defensive considerations. . ”

And since the latter judgments, the following applies to both the cases referred to under (i) and the cases under (ii):

– Contrary to the plea in law, such an accusation also only leads to liability of the director if he knew or should reasonably have understood that the creditor would suffer damage as a result of not complying with the obligation ”.
– Losses that must be foreseeable (!) At the moment when the director enters into the underlying obligations on behalf of the company (according to legal ground 4.5 of ECLI: NL: HR: 2014: 2627).

According to the Supreme Court, there was a personal serious reproach in the judgment ‘Bouwbedrijf‘ (ECLI: NK: HR: 2014: 1204) in the following case:

“(I) [The director] has encouraged Construction Company to make substantial payments to Beheer (the parent company of Construction Company) just before its bankruptcy,
(ii) Prior to and at the time of the disputed payments, there was a significant negative equity of Construction Company,
(iii) creditors [remained] (mostly) unpaid […],
(iv) [there were] reports to the tax authorities […] regarding inability to pay with regard to turnover and wage tax, and
(v) by the tax authorities [had] seized [..].
(vi) [plaintiff] [had] control over both Bouwbedrijf and Beheer
(vii) the business operations of Bouwbedrijf en Beheer [were] in the hands of [claimant]
(viii) in all these circumstances, the (internal) division of tasks and tasks between Beheer and Bouwbedrijf brought about by [plaintiff] does not detract from the unlawfulness of its conduct).

It is thus concluded in the contested judgment that [plaintiff] knew or should reasonably have understood that the payments by Construction Company would result in Construction Company not meeting other obligations and would not offer any recourse for the damage resulting therefrom, so that he would promoting those payments is personally a serious blame. ”

In the latter case, the company was cleared out in plain Dutch in the face of bankruptcy, which is not allowed. In that case, there is a personal and serious reproach by the director on the basis of which he is liable in addition to the company.