BGH on Pre-Contractual Disclosure for Former Shareholders

Aug 4, 2023 Benn-Ibler Rechtsanwälte

The German Federal Supreme Court (Bundesgerichtshof, hereinafter BGH) had to decide in several proceedings on the liability of founding partners of a limited partnership (Kommanditgesellschaft). The court distinguished prospectus liability from liability for fault in conclusion of a contract (culpa in contrahendo).

Investors in a limited partnership sued for damages, claiming that they had not been adequately informed by the founding partners about the financial and personal interconnections involved within the company.

According to the Second Civil Senate, within the scope of application of the special statutory prospectus liability, the liability of former shareholders for breach of the duty of disclosure is not generally excluded.

However, the Anlegerschutzverbesserungsgesetz (German Investor Protection Improvement Act) has created special disclosure obligations, which justifies a reorientation of the previous case law on the existing general disclosure obligations of existing shareholders.

Accordingly, a pre-contractual duty of disclosure can only apply to those former shareholders who either take over the distribution of the investments to the investors themselves or are otherwise responsible for the distribution taken over by another party. According to the BGH, those former shareholders who are entitled to manage the company are therefore obliged to distribute.

However, a former shareholder does not bear responsibility for properly informing potential investors merely because the sole shareholder had undertaken the distribution of the investments on the basis of a mandate given by the fund company. Similarly, the fact that a former shareholder was associated with the sales company did not justify responsibility for distribution.

Thus, if the scope of the special law on prospectus liability precludes the liability of the founding shareholders as the originators of the prospectus under the aspect of a pre-contractual breach of duty due to the use of an inaccurate, incomplete, or misleading prospectus as a means of written information, this does not preclude a liability for breach of the duty to inform in connection with a duty to distribute.

BGH II ZR 57/21 (27June 2023)