Shareholders’ Liability for Ruining a Company in Light of the CJEU’s Judgment in Kornhaas

Abstract

The author examines whether the concept presented by the CJEU in its Kornhaas judgment of 2015 may also find application when seeking the personal liability of the members (shareholders) of an EU foreign company having its COMI in Germany. The background against which the following article considers this question is the legal concept of Existenzvernichtungshaftung—the personal liability of GmbH shareholders for ruining a company—as developed by the German Supreme Court of Justice. The author discusses the CJEU’s judgment in the Kornhaas case and its background and consequences, as well as briefly discusses separate corporate identity and its limitations, including theories of disregarding the autonomy of a corporation and its variation of Existenzvernichtungshaftung. On the basis of that analysis the author examines both the question of whether Existenzvernichtungshaftung is covered by lex fori concursus under the EIR and that of whether its application constitutes a restriction on the freedom of establishment under the rules developed in Kornhaas. In conclusion, the author analyzes the possible legal consequences of the views presented in this paper.