In April 2017, Italian Supreme Court, through the following three decisions, has rewritten certain rules and principles governing directors' liability.
I. Decision No. 9983 dated April 20, 2017 concerning bank's liability for the damages caused to the company (jointly with company's directors) as a consequence of "abusive resort to credit".
For the first time, the Supreme Court has explicitly admitted the receiver in bankruptcy to sue the bank in order to claim compensation for the damages caused to the company as a consequence of having abusively and illegally resort to credit, jointly with the directors.
Art. 218 of Italian Bankruptcy Law already establishes criminal liability for the directors who conceal the state of insolvency of the company by continuing to resort to credit (the so-called "abusive resort to credit").
Nonetheless the Supreme Court has affirmed that the bank could also be held jointly liable with the directors towards the company (the receiver will be entitled to initiate the relating action in his quality as company's legal representative) since the abusive granting of credit has contributed to exacerbate company's financial situation.
According to the Supreme Court, the following are the grounds of bank's liability (and, on the other hand, the receiver's claim for compensation): a) violation of the principle of prudent management in the creditworthiness assessment (pursuant to Article 5 of the Testo Unico Bancario, the Italian Banking Act) and b) bank's conduct which jointly with directors' one (i.e. abusive resort to credit) has contributed to delay the verification of company's insolvency resulting in artificially maintaining a company already went bankrupt.
Damages may be established, according to the Supreme Court's opinion, not only on the mere cost of the financing but also on the basis of the aggravation of company's financial default.
II. Decision No. 18834 dated April 19, 2017 concerning incoming director's liability for the failure to pay VAT made by previous directors.
The incoming director who takes office upon the filing of VAT return may be held liable for any failure to pay VAT previously made, pursuant to art. 10-ter of Legislative Decree No. 74/2000 according to which any amount due resulting from annual VAT return must be paid by the 27th of December of each year.
This is what Italian Supreme Court has recently ruled, pointing out that any person who assumes the office of company's director voluntarily exposes himself to any and all the consequences that may derive from violations to tax law previously made.
The incoming director is therefore responsible to verify, before accepting the appointment, not only that company's accounting is true, correct and duly kept but also the duly and timely fulfillment of any tax obligation arisen before his/her appointment.
The incoming director shall solely bear any risk of liability deriving from the failure to carry out such check.
III. Decision No. 18924 dated April 20, 2017 on dummy director's liability
Dummy director may be held jointly liable with the de facto director for any illegal conduct, including tax law violations, made by the latter.
Such principle has been recently affirmed by Italian Supreme Court in its decision No. 18924 dated April 20, 2017.
According to the Supreme Court, dummy director's liability can be directly grounded on Art. 40 paragraph 2 of Criminal Code according to which any person may be held liable for a crime which did not prevented, having the ability to.
The Court has pointed out that dummy director, by consciously assuming the corporate role of director and legal representative of company, on one side, and admitting, on the other side, the presence of a de facto director in the background, who actually takes any decision relating to the management of the company, covers the unlawful conduct of the latter through the violation of the duty of supervision.
The acceptance of the appointment as (dummy) director, according to the Court, exposes therefore the same to any risk connected with the conduct of de facto director, including the risk of liability deriving from the performance of legal transactions through the coverage received.
The only way for the dummy director to avoid any risk of liability is by giving proof of his (actual) inability to manage or interfere in the management of the company.
