OGH on the liability of a dual function holder within a group

Feb 10, 2021 Benn-Ibler Rechtsanwälte

If the obligatory approval of the supervisory board is not obtained when a letter of comfort is issued by the executive board of the subsidiary, the managing director is then directly liable to the parent company if he also serves on the executive board of the latter.

In the present case, the group subsidiary (W-AG) issued a letter of comfort in favor of the second-tier subsidiary (WS-AG), signed by the defendant as Chairman of the Management Board of W-AG, with the following content: "Should it be necessary to support WS-AG, W-AG will provide all reasonable support to WS-AG in fulfilling the latters' obligations [...]”.

Both the rules of procedure of the plaintiff group holding company (L-AG), in which the defendant was also a member of the management board, and the rules of procedure of W-AG stipulated that the assumption of letters of comfort required the prior approval of the supervisory board. The defendant did not obtain such approval before issuing the letter of comfort.

The Austrian Supreme Court (Oberster Gerichtshof, OGH) ruled on claims for damages of the L-AG against the defendant dual function holder, which had arisen from the failure to obtain the authorization. In particular, it was questionable whether the plaintiff - as a shareholder - could assert her claims directly against the defendant at all. A liability of the executive board only exists vis-à-vis the company (W-AG), but not vis-à-vis the individual shareholder (L-AG).

According to the OGH, the mere existence of a group does not imply that the managing directors of the controlling companies are liable for illegal acts of the legally independent companies belonging to the group. Nevertheless, for practical reasons, a certain "group management obligation" of the board of the parent company is recognized.

For this reason, the OGH affirmed the defendant's liability, because as the executive board of L-AG he allowed the letter of comfort to be issued - without the consent of the plaintiff's supervisory board - and thus violated his duty to manage the group. As a member of the plaintiff's management board, he would have been obliged to exert appropriate influence on the management board of the subsidiary - i.e. on himself - and to refrain from issuing the letter of comfort.

OGH 6 Ob 209/20h (25.11.2020)