A significant change was made to the rules on manager liability in the Bankruptcy Act last year, which was almost completely overshadowed by the economic crisis caused by the coronavirus. If the court determines during the liquidation proceedings that a former manager of a company did not act in the interests of creditors in a situation threatening insolvency, then he or she is liable with his or her personal assets.
Previously, after the determination of liability, creditors or the liquidator had 90 days to file a lawsuit against the former manager of the company, in which they could request the settlement of their claims from the manager’s private assets. However, after last year’s amendments, there are now 5 years to file this lawsuit against him or her.
According to available statistical data, such lawsuits involve significant amounts. According to some statistics, in 56 percent of the lawsuits filed, liability was sought for an amount exceeding 10 million forints. The first-instance courts also granted the claims in two-thirds of the proceedings.
If the managing director considers that the company is approaching a situation threatening insolvency, he must immediately convene a general meeting in order to be exempt from liability. At this meeting, documented information must be provided that reveals the company’s situation and at the same time, he must come up with a reasonable proposal for action. It is at least as important that he does not take any additional measures that could increase the losses of creditors. In this case, the company’s manager can avoid liability