FBK Legal at Conference on Liability of Top Managers
Ekaterina Kotova, Director of the Legal Consulting Department at FBK Legal, has spoken at a conference titled “Liability of Company Top Managers: Recovery of Damages, Subsidiary and Criminal Liability”, which was organised by Pravo.ru. The conference focused on consequences of the recovery of damages from top managers, increased risks of subsidiary liability in bankruptcy cases and the impact of beneficiaries’ criminal liability on company reputation.
Ekaterina Kotova spoke about a pressing issue in subsidiary liability disputes – liability of the debtor’s controlling persons. Until recently, courts tended to hold them liable jointly without taking into account the extent of their guilt or wrongdoings of each of them. Ekaterina Kotova examined one of the resolutions of the Russian Supreme Court, which requires that the court should determine involvement of each of the controlling persons in respective transactions.
“To avoid subsidiary liability, the debtor’s controlling persons can refer to the business judgement rule, acting reasonably and in good faith, following internal corporate regulations effective in the company,” Ekaterina Kotova says.