Personal Liability for German Managers Expands: Court Ruling Sets Precedent Beyond Written Contracts
08.06.2026 - 02:13:18 | boerse-global.de
A recent decision from the Offenbach Labor Court (Case 1 Ca 136/25) has sent a clear signal to mid-level executives in Germany: responsibility does not stop at the job description. The court ruled that managers below board level carry unwritten duties of supervision, monitoring, and damage prevention, derived from a general duty of loyalty to the company. The case involved a whistleblower report in October 2023 about illegal practices at a precious metals recycling firm. A chief legal officer failed to properly handle the complaint. The consequences were severe: the company had to set aside provisions of €457.7 million, and the Frankfurt public prosecutor’s office is now investigating for fraud and breach of trust. The court upheld the executive’s dismissal for cause, confirming that omissions in oversight can have life-changing personal consequences.
The ruling dovetails with well-established principles for managing directors of GmbHs or UGs. When insolvency looms—whether from impending illiquidity or over-indebtedness—directors have exactly three weeks to file for bankruptcy. Missing that deadline means personal liability. For German limited partnerships (KG), liability rules remain starkly binary: the general partner (Komplementär) is exposed with personal assets without limit, while the limited partner (Kommanditist) is only on the hook up to the amount of the registered contribution.
Shareholders, too, face rising risk. The Federal Court of Justice (BGH) set firm boundaries in a landmark ruling on December 13, 2004 (II ZR 256/02). Any shareholder who deliberately strips assets from a GmbH for non-operational purposes—even indirectly through influence on the company’s asset access—can be held personally liable for what is termed an “existence-destroying intervention.”
In a separate decision, the BGH offered relief to pharmacists connected to the collapsed AvP settlement center. Payments made under a BaFin order from September 2020, which directed cash to pharmacists, do not have to be repaid. The court in Karlsruhe overturned earlier judgments by the Regensburg Regional Court and the Nuremberg Higher Regional Court, reasoning that the BaFin directive was not an absolute ban on payments—it only forbade transfers that would harm creditors.
Debt relief under German insolvency law also comes with a trap. Creditors can only apply for residual debt discharge if they have actually registered their claims in the insolvency table. Missing that step forfeits the right. Yet the door remains open to seek damages for intentional, immoral injury.
Looking ahead by two years, German insolvency and restructuring law is going digital. From 2026, electronic case files will become standard in civil procedure, including insolvency proceedings. The reform will also incorporate EU directives on preventive restructuring frameworks and improved early warning systems. Parallel to the legislative changes, professionals are developing an enhanced online access portal under the working title “Insolvenzverfahren 4.0,” aiming to boost efficiency and legal certainty for all parties involved.
