NETHERLANDS Law and Practice Contributed by: Marcel Willems and Rowan Hamer, Fieldfisher
said in general and depends on the circumstances of the case. The more serious the company’s financial difficulties, the more the directors and officers should consider the interests of creditors, for example, in their decision-making. After the company is declared bankrupt, the board’s role becomes a very modest one. After all, with the bankruptcy, the company loses the power to admin - ister and dispose of the company’s assets, which then is the task of the appointed trustee. Acts in respect of the company’s bankruptcy estate by the directors do not bind the estate. However, the directors do have the obligation, for example, to provide to the trustee any information they request, to co-operate in the admin - istration and liquidation of the bankruptcy estate, and to make the accounts and records available. 7.2 Personal Liability of Directors In the Netherlands, directors and supervisors may be part of one management board (one-tier board, or monistic governance model). However, supervisors may also be part of a separate supervisory board that supervises the board of directors within the company (two-tier board, or dualistic governance model). A two-tier board is most common in the Netherlands, which is why the duties of directors and supervisors are discussed separately in this chapter. Directors’ liability is subject to a raised threshold for liability: the director is only liable if they are found to be seriously culpable. Otherwise, it is only the legal entity itself that is liable. Whether this threshold for liability is met depends on the circumstances of the case. Each executive director is obliged to perform their duties properly and is (individually) responsible for the general course of affairs at the company. A direc - tor may be personally liable to the company in cases of gross mismanagement, except where they are not deemed personally at serious fault, taking into account the division of responsibilities within the board, and have not neglected to take reasonable steps to pre - vent the consequences of such mismanagement. In principle, liability among directors is collective. A director may be held liable to the company if they are deemed seriously culpable. Assessing serious culpa -
bility involves considering all relevant circumstances, with a key factor being whether the director acted with the foresight and care expected of a competent and diligent director fully prepared for their responsibilities. Directors of a company should exercise due care in the performance of their management duties towards, for example, creditors of the company. If a director fails to do so, they may be held liable for damages caused as a result by the creditor on the basis of a wrongful act ( onrechtmatige daad ). Unlike misman - agement as a ground for liability, the wrongful act must be assessed for each director. In case law, a distinction is made between standards of care with regard to new creditors and existing credi - tors of the company. The director is, in addition to the company, liable if they: • have acted on behalf of the company, and, when entering into obligations on behalf of the company, knew, or should reasonably have known, that the company would not be able to fulfil its obligations and would not provide an opportunity for recovery for the damage caused; or • caused or permitted the company to fail to com - ply with its legal or contractual obligations, and the acts or omissions of the director concerned (in their capacity as director) towards a specific creditor (or creditors in general) were, in the given circumstances, so negligent that the director can be held personally culpable. The first category includes directors who, on behalf of the company, enter into commitments frivolously. The second category includes directors who bring about or allow the company to make selective payments (by paying just one or a few creditors) or selective non- payments (by paying all creditors but one or a few). At the time the bankruptcy is declared, the trustee may hold each director jointly and severally liable to the estate for the amount of the debts (including the costs of the estate, such as their own fees) to the extent that they cannot be satisfied by liquidation of the remaining assets. The board of directors is liable if it has manifestly improperly performed its duties and it is plausible that this is an important cause of the
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