No Coverage Of D&O Insurance For Damage Resulting From Delay In Insolvency Filing

Author:Mr Jan Antholz
Profession:SKW Schwarz
 
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In a landmark decision, Düsseldorf Higher Regional Court clarified that general managers cannot rely on their D&O insurance cover in the event of claims for repayment by an insolvency administrator under Section 64 German Act on Limited Liability Companies (Case I-4 U 93/16).

The court case dealt with the everyday case that a general manager had made payments, although the company was already ready for insolvency. Section 64 Act on Limited Liability Companies stipulates that a general manager is personally responsible for payments that the company has made despite insolvency or over-indebtedness.

In the case at issue, the general manager requested exemption from her D&O insurance for the insolvency administrator's claims. The insurance company refused, which has now been confirmed in two instances. Reviewing the...

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