COBALT team successfully represented its client in a complex case concerning the liability of former company directors for damages caused to the company. The court held that responsibility for the company’s insolvency and damage to the creditors lies not only with formally appointed (de jure) directors but also with actual (de facto) directors who effectively made management decisions, gave instructions to official directors, and performed functions ordinarily attributed to company directors.
The judgment is significant in that damages were awarded jointly and severally against several de jure and de facto directors who held the office of a director in different periods. The court clearly emphasised that a person who actually performs managerial functions bears the same duties and liabilities as a formally appointed director, regardless of whether the role was officially registered.
The case was notable for its broad assessment of liability: the court examined not only the formal management periods but also the actual decision-making, accounting practices, and the causes of the company’s financial deterioration. The court found that the company’s losses resulted from systematic unlawful conduct and that liability extends to all individuals who acted as company directors, irrespective of their legal status.
The judgment sets an important precedent in that more than one person may be recognised as de factor directors of a company, where functions attributable to a company director are discharged by several individuals.
COBALT team advised the client throughout the entire process – from developing the case strategy to representing before courts. The team included Partner Marius Inta and Managing Associate Valdemaras Kovalevskis.
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