TGS Baltic successfully represented the former directors and shareholders of the bankrupt private limited company in a dispute 

09.04.2021 TGS Baltic successfully represented the former directors and shareholders of the bankrupt private limited company in a dispute 

TGS Baltic team successfully represented the bankrupt private limited company's former directors and shareholders in a dispute following a claim for damages brought by the bankrupt credit union AMBER.

AMBER claimed that the company's directors and shareholders had contributed to and effectively carried out the fraudulent transaction, thereby appropriating the funds from AMBER and causing damage.

The Lithuanian Court of Appeal rejected the arguments of AMBER's appeal and left the decision of the Vilnius Regional Court unchanged – the Lithuanian Court of Appeal found that the claims against the company's former directors and shareholders were reasonably dismissed by the court of the first instance and that the company's former directors and shareholders had not committed any unlawful actions against AMBER.

The courts assessed the civil liability of the company's directors and shareholders in the context of Articles 6.263 and 2.50 of the Civil Code of the Republic of Lithuania and concluded that:

  • A creditor may bring a direct claim (under Article 6.263) against the company's directors and participants, but only if these subjects have caused direct damage to a particular creditor.
  • In order to satisfy an individual creditor's claim, the general conditions of civil liability must also be proved, which, in the case of a creditor's claim, amount to the unlawful actions directed to a specific creditor and, in particular, the damage caused to the creditor by those actions.
  • In civil liability cases, it is necessary to assess whether the person named as the defendant in the case performed functions specific to the director or participant. In the individual case, it is necessary to assess whether the participant has performed actions that, according to the laws and the establishment documents, do not fall within its competence as a participant, but are specific to the director. In such case, he is responsible as the actual director and must take responsibility as the director. When the same person is both, the director and the participant, or only the participant, and has committed actions within its competence as a participant, his liability shall be determined as the civil liability of the participant.

The clients were represented by our litigation experts – associate partner Žydrūnė Stuglytė and associate Berta Kašėtaitė.