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Andra Rubene speaks in the conference of the Ministry of Justice Liability regulation in commercial law

21.05.2010

20.05.2010. senior associate of Grunte & Cers Andra Rubene spoke in the conference of the Republic of Latvia Ministry of Justice Liability regulation in commercial law organised for law scholars and practitioners.                      
Andra Rubene reported on the results of her research on duties and liability of various management institutions of capital companies in the crisis situation, characterised by rapid growth and rapid fall. The senior associated evaluated the possible claims against the management institutions of capital companies.

Concluded at the end of the research that the claims of companies pursuant to a decision of shareholders or upon their initiative will be raised less in those situations, when the activity of the board and supervisory board has been in line with the will of shareholders or when the shareholders themselves have adopted the decision causing losses. Less claims will also be in the situations, when the shareholder of the company – individual is the board member of the given capital company. Similarly such claims will be less within the groups of companies, in particular, when the dependent undertaking is under strong influence of one dominant undertaking. The reason being that shareholders will not go against themselves.

Claims of companies pursuant to a decision of shareholders or upon their initiate will be more frequent in cases of disputes between majority and minority shareholders, in case of change of shareholders (new shareholders might go against the old board) and in case the board or supervisory board has otherwise lost understanding with the shareholders.

However, claims of companies upon initiative of creditors could be prevented by lack of motivation to fight with the company, i.e. in the interests of all creditors, in particular, in the situations, when collection from the company is not possible and the company is already or will be recognised insolvent.

For more information please see: http://www.tm.gov.lv/lv/jaunumi/notikumi.html?news_id=3431

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