Liability

In the current economic climate, it is advisable to have a proper understanding of the various potential liability your company is exposed to, or even you as a private individual, if you are a director, and to take the appropriate action, insofar as necessary.

• In principle, legal entities bear sole liability for their obligations, but under specific circumstances this liability can also extend to the shareholders or the directors. This may include group guarantees, surety agreements, group financing, fiscal unities, support letters or keep-well arrangements, and directors' and officers' liability in case of bankruptcy or the (untimely) notification of an inability to pay. Have these potential risks been sufficiently identified
  
  
• Have any declarations of liability (so-called 403 statements) been issued within a group structure? Based on this statement, the company issuing the statement is liable for all debts of the company for the benefit of which it has been issued. If a 403 statement is used, it must therefore be assessed if, and if so, at which moment, it should be withdrawn. This possibly leads to a limitation of liability.
  Oftentimes, a shareholder will issue a so-called 'going concern support letter'. In the worst-case scenario, the 'going concern support letter' could give the receiver and the creditors direct claims in respect of the shareholder.
  
  
• Has a publication exemption been granted with regard to the annual accounts? Has this exemption been correctly applied, and what are the risks in that context?
  
  
• Am I, as a director, insured against liability claims? And if so, which claims are covered by the insurance policy, and which are not?
  
  
• Have any payment guarantees or quality guarantees been given by the shareholder in important agreements with third parties? In addition, it should be analyzed whether any group guarantees have been given to credit insurance companies.