GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
the company; they always have to act in the best interests of the company and its group. However, the interests of the company include, to a certain extent, the interests of all stakeholders (such as creditors and employees) of the company (the German “stakeholder model” in contrast to the Anglo-Saxon “shareholder model” ). 4.8 Consequences and Enforcement of Breach of Directors’ Duties In an AG and SE (with a few exceptions in special statutory rules – eg, in the event of an insolvency or in the context of wilful misconduct), creditors and shareholders cannot enforce a breach of duties of members of management and super - vising bodies. The members of the bodies are rather jointly and severally liable in the internal relationship towards the company due to their joint responsibility. Thus, individual members of a management and supervising body may not absolve themselves from liability because a certain task or responsibility was delegated to a different member internally. Furthermore, such a breach may lead to a dis - missal and, with respect to the management members, a termination of their service contract. In principle, the supervisory board is responsible and – according to case law – even has a duty to assert damage claims to the management board members. The company may waive its damage claims or enter into settlement arrangements on these claims only if three years have lapsed since the claim arose and the general meeting resolved thereupon without a minority of the shareholders (at least 10% of the share capital) raising an objection. Where members of the supervisory board culpa - bly breach their duties, the management board is responsible for pursuing possible damage
claims against the supervisory board members jointly and severally. Claims Against Members of Corporate Governance The rights and obligations on asserting claims against members of corporate governance bod - ies in an AG, SE and KGaA are independent of whether or not the members of these respective bodies have been discharged. Another particu - lar consequence of a breach of duty in a listed company is that the company may be obliged to disclose it to the capital market by way of ad hoc notification. In the case of a GmbH, the consequences of a breach of the duties of managing directors are, to a great extent, comparable to an AG. In gen - eral, the managing directors, like the manage - ment board members, are not directly liable to the creditors of the company. The shareholders’ meeting has the right to pursue damage claims and to decide about the dismissal of manag - ing directors and the termination of the service contract. In contrast to the situation in the AG, if the share - holders’ meeting has discharged the managing director knowing the facts underlying such a breach, the discharge leads to an exclusion of liability. 4.9 Other Bases for Claims/Enforcement Against Directors/Officers Certain special law remedies and, in the case of wilful misconduct, general civil law remedies, exist. From the company’s point of view, these do not generally extend claims any further than those under corporate law. Since shareholders do not have a direct claim against the members of management and supervising bodies under corporate law, in certain situations (eg, capital
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