Accura’s Dispute Resolution Team has just won a management liability case brought by the bankruptcy estates of two travel companies that went bankrupt during the corona pandemic in 2020. Accura’s client, a former member of the board of directors, had been sued personally for DKK 50 million.
In connection with the trustee’s scrutiny of the bankruptcy estates’ activities, the trustee discovered that two capital increases made in the companies at the end of 2018 had actually been made by contributing already pledged shares as security for debt to a foreign bank. Therefore, the bankruptcy estates believed that, as the capital increases had been made by means of pledged funds, the capital increases had not added any real value to the companies. The bankruptcy trustees, therefore, also believed that the companies had effectively continued to operate on a shoestring from 2018 until their bankruptcy in 2020.
On that basis, the bankruptcy estates raised an alleged claim of approx. DKK 50 million against the former members of management based on the viewpoint that the companies’ accumulated negative balance up to their bankruptcy could have been avoided if the companies had gone bankrupt already at the end of 2018.
The court found that even though the members of management had engaged in actionable conduct by participating in a capital increase that reflected a value of DKK 50 million only on paper, the bankruptcy estates had not lifted the burden of proof that there was a causal connection between the inadequate capital increases and the subsequent accumulation of a negative balance until the companies’ bankruptcy. On the contrary, the court emphasised that it was the corona pandemic, not the inadequate capital increase in 2018, that had ultimately led to the companies’ bankruptcy. Therefore, the court found for all of the defendant members of management.
Adam Tao Michaëlis and Emma Franck Bovien conducted the case for one of the defendant members of management.