Austrian Supreme Court Clarifies "de Facto" Managing Director's Liability For Wrongful Trading

In a recent ruling, the Austrian Supreme Court has defined de facto managing directors and their obligations and liabilities in connection to wrongful trading.

The decision

The key takeaways from the ruling are:

• A "de facto" managing director is an individual who permanently and distinctively "takes" the place of a corporate body that is authorised/required to file for insolvency.
• The de facto managing director must actively influence the actual managing director so that the latter fulfils their obligations to file for insolvency proceedings at the appropriate time. 
• If the de facto managing director fails to assert their influence, they are potentially liable for any damages caused by the failure to file for insolvency proceedings at the appropriate time.