NETHERLANDS Law and Practice Contributed by: Manon Cremers, Heleen Kersten, Frédérique van der Wegen and Sandra Rietveld, Stibbe
External liability in bankruptcy A managing director may be personally liable in the event of a company’s bankruptcy. In a bankruptcy in which any claim remains unpaid, a bankruptcy trustee may hold directors liable for manifestly improper management ( kenneli- jk onbehoorlijk bestuur ) that was an important cause of the bankruptcy. Manifestly improper management can be estab - lished if, among other things: • the books and records ( administratie ) were improperly kept and the corresponding books, documents and other data carriers were not kept in such a way that the rights and obligations of the legal entity can be known at all times; or • the company has failed to fulfil its duty to publish its annual accounts. In these situations, it is assumed that manifestly improper management was an important cause of the bankruptcy. This assumption can be refut - ed by directors. If a bankruptcy trustee’s claim is successful, each managing director is jointly and severally liable in relation to the bankrupt estate for the deficit in the bankruptcy, being the amount of the liabilities to the extent that these cannot be satis - fied by the liquidation of the other assets. Indi - vidual directors can be exonerated if they can demonstrate that they cannot be held liable for the manifestly improper management and that they did not fail to take measures to mitigate the consequences of the manifestly improper management.
management. Supervisory directors may also be held liable for improper supervision. In addition to liability for mismanagement, liabil - ity for damages may also be based on tort law ( onrechtmatige daad ). This concerns the liability of each director individually and not the collec - tive liability of the board. In an insolvency situation, the trustee may sue the directors on behalf of the company. External Liability Personal liability of a managing director towards third parties may arise if the managing director commits a wrongful act in their capacity as a director, or in the event of the bankruptcy of the company. In a situation in which the company is liable for damages based on non-fulfilment of contractual or statutory obligations or a wrongful act, a man - aging director may in some cases also be held personally liable for the damages. A managing director is personally liable only if they bear seri - ous personal blame ( ernstig persoonlijk verwijt ). Serious personal blame on the part of a manag - ing director generally exists if: • the managing director knows or should have known that the company cannot fulfil the obli - gations under the agreement and neverthe - less enters into an agreement on behalf of the company and knows and should have known that the company offers no recourse; or • the managing director causes or allows the legal entity to fail to fulfil an existing obligation and offers no recourse.
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