Recovery of Damages from Controlling Persons

It is not only the person who signed the document who is liable. The law imposes the obligation to compensate for losses on the general director or other person authorized to act on behalf of the company, on members of its collegial bodies and on any person who is actually able to determine the company's actions, including by giving instructions to its chief executive. All of them are obliged to act in the company's interests in good faith and reasonably.

The key question in the dispute is how the decision was taken. Adverse consequences in themselves are not a ground: a loss-making decision taken with due care and in the company's interests does not give rise to liability.

The procedure for hearing the dispute depends on the stage. After the first insolvency procedure has been introduced and during subsequent procedures, a claim for compensation for losses caused to the company is heard in the bankruptcy case.

Claims of different kinds are not mutually exclusive. Holding a person liable for the company's obligations does not prevent the recovery of damages from that person to the extent not covered by the amount of such liability.

• Transactions on unfavourable termsAcquisition or disposal of assets at a price other than the market price, and transactions without consideration.
• Payments to related partiesTransfers to group members, loans without security or repayment, payment for services without evidence that they were rendered.
• Unjustified paymentsBonuses, compensation and other payments made without a decision of the competent body or without consideration.
• Loss of assets and documentsDestruction or shortfall of assets, failure to hand over documentation and the consequences for the company.
• Decisions of collegial bodiesAssessment of voting and the allocation of powers, the position of members of the board of directors and the management board.
• Defending the chief executiveSubstantiating the business purpose of the decision and the limits of ordinary business risk.
• Claims after termination of the caseClaims by creditors in their own favour where the proceedings have been terminated or the petition returned owing to insufficient funds.

• Written assessmentAn analysis of the grounds for the claim and the objections, the calculation of the amount and the evidence for each instance.
• Position in the disputeAn application or response, explanations and annexes, prepared in the course of the proceedings.
• Participation in hearingsPresenting arguments and responding to the arguments of other parties to the dispute.
• Next stepsAction after the court ruling is issued, including appeals and enforcement matters.

The outcome of the service is the work performed within the scope agreed with the client.

1. Materials

   The position is built on the documents and the circumstances of the case; the following points are relevant.

   • Minutes and ordersDocuments on the decisions taken and their implementation.
   • TransactionsContracts, payment documents and correspondence on the instances on which the claim is based.
   • PowersThe charter, job descriptions, powers of attorney, allocation of areas of responsibility.
   • Financial statementsAccounting documents and information on payments at the time the decisions were taken.
   • Case materialsThe application received, the procedural rulings issued and documents from the bankruptcy case.
   • Purpose of the requestBringing a claim or defending against one.

2. Assessment

   On the basis of the materials, the strengths and weaknesses of the position, the risks and the possible courses of action are identified.

3. Plan

   For the chosen option, a plan is drawn up: the sequence of steps, timing and scope of work.