HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
such dividends, based on the shareholders’ resolu- tion. Ultimately, the shareholder can enforce its divi- dend claim in a lawsuit or, in extreme cases, even in a liquidation. 10.2 Remedies Against the Directors The directors and other officers, such as supervisory board members, may be held liable in certain cases vis-à-vis the shareholders or the company’s creditors, or even the company itself. Liability Vis-à-Vis the Company Firstly, the director may be held liable vis-à-vis the company for damages caused to the company through the breach of their managerial duties. The shareholders’ meeting decides whether to enforce this claim and whether to initiate a legal proceeding. The initiation is also available as a minority right (see Secondly, the director may be liable vis-à-vis the shareholders, who may initiate a claim for damages against the director after the termination of the com- pany. This may be initiated within one year following the termination of the company by any shareholder who was a shareholder of the company at the time of the termination of the company, regardless of the shareholder’s participation interest. The shareholder is entitled to this claim in proportion to its earlier capital contribution. Liability Vis-à-Vis the Creditors of the Company Thirdly, any creditor – or the liquidator in the com- pany’s name – may initiate a proceeding during the liquidation process before the court to establish that the company’s former management failed to comply with their obligations in the three years prior to the commencement of the liquidation. 1.4 Variation of Shareholders’ Rights ). Liability Vis-à-Vis the Shareholders The foregoing also applies to de facto directors, mean- ing any person who had significant power to influence the decisions of the company. Should the damage be caused by several persons together, their liability shall be joint and several. If the liability of directors or de facto directors is estab- lished by the court, the creditors may claim the satis-
faction of their unsatisfied claims up to the amount of the damages caused by the directors and established by the relevant court decision, following the termina- tion of the liquidation proceedings. 10.3 Derivative Actions Generally, the company itself, represented by its director(s), is entitled to initiate litigation in its own name. However, as a minority right it is possible for share- holders holding a certain stake in the company to bring derivative actions on behalf of the company vis-à-vis another shareholder, the director(s), the members of the supervisory board or the auditor, if the sharehold- ers’ meeting rejects the enforcement of claims against those persons. 11. Shareholder Activism 11.1 Legal and Regulatory Provisions The same rules apply to shareholder activism as listed under 1.3 Types or Classes of Shares and General Shareholders’ Rights , which provide the major tools for activism. Shareholder activism must also comply with the framework of competition law, especially where co- ordinated action of shareholders could qualify as act- ing in concert. For public companies (Nyrt), activism is also affected by capital market rules including acting in concert rules (see 2.12 Institutional Shareholder Groups ), takeover bid obligations (see 3.4 Disclosure of Inter- ests ) if activism leads to acquiring additional holdings or a controlling position, and market abuse regula- tions. Shareholder rights may not be abusively exercised. Shareholder activism may also be limited by statu- tory remedies available to the company against the shareholder, as follows.
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