Increased liability for managing directors bow wave theory rejected by court – International Law Office

German regulations obliging managing directors to monitor the liquidity of a company during crisis situations are typically rather strict and give rise to the risk of personal liability in cases of non-compliance. Legislation requires company management to file for insolvency proceedings without undue delay in the case of illiquidity or over-indebtedness. Continued trading where the company is considered to be materially insolvent can have serious consequences for managing directors and leave them exposed to considerable damage claims. Therefore, in the context of a financial crisis or restructuring process, it is crucial that…