A garment manufacturing company with more than 30 employees ran into financial difficulties when one of its larger customers scaled back its orders. The court later found that the company had become de facto insolvent in spring 2023. The claimant argued that from that very date our client, the company's CEO, was obliged to cease operations without delay — continuing them increased the liabilities to creditors. The court that first heard the case agreed with this position and ordered the client to pay the entire amount claimed, more than EUR 100,000.
On appeal, we secured the setting aside of this judgment and the remittal of the case for fresh examination. We built the defence on the fundamental difference between the insolvency date established later, retrospectively, and what the CEO actually knew and could have understood at the time. We proved that at that time she had objective reasons to regard the difficulties as temporary: that month the company received around EUR 37,000 in revenue, had orders in progress and was seeking new ones, and one larger customer had promised in writing that orders would grow in the second half of the year. Delays in the supply of materials also prevented part of production from starting on time.
Importantly — the client was not passive. Once it became clear that operations could not be restored, she asked the accountant for the financial data, shortly afterwards decided to initiate bankruptcy proceedings, and a few weeks later filed the relevant petition with the court herself. Admittedly, it was not accepted because a preliminary procedure had not been carried out — the claimant tried to turn this error into evidence of negligence, but we demonstrated that the law does not require a manager to hold legal qualifications, and that the client herself had been the first to apply to the court.
We also refuted the claimant's calculation of the damage: its list of debts of around EUR 29,000 did not include debts to employees, the tax administrator and the State Social Insurance Fund (Sodra). The statement of balance-sheet accounts that we submitted showed that on that date the company's liabilities already amounted to more than EUR 80,000 — the court recognised this document as the most objective.
In the retrial, the claim, reduced to almost EUR 70,000, was dismissed in full, and this outcome was upheld at the appellate instance as well. The client was awarded her litigation costs.
The case shows that a manager's liability does not arise merely because a court has retrospectively determined the date of insolvency — what matters is what the manager actually knew and could have understood at the time. Carefully preserved financial records become decisive evidence when the true course of events has to be reconstructed.
