CORPORATE – Corporate liability action and restitution of defaulting director’s compensations

Newsletter n. 90 – November 2023

CORPORATE

Corporate liability action and restitution of defaulting director’s compensations

On 26 February 2023, the Court of Milan issued a ruling in case No. 11045/2018 concerning the corporate liability action undertaken by a “non-director” quotaholder against a quotaholder in an S.r.l. holding the office of director pursuant to Article 2476, paragraph 3 of the Italian Civil Code. The action was aimed at ascertaining that the director had used company’s assets for personal purposes and, based on the failure to duly fulfil his mandate, the restitution of the compensation and severance pay received during his entire term of office. The Court deemed the claim on mismanagement of the company’s assets to be well-founded. However, it considered the restitution of the director’s compensation to be inadmissible, since the corporate liability action only provided quotaholders with an action subsidiary to the company’s action for compensation for the damages it suffered. Moreover, non-fulfilment of the director’s mandate does not break the contractual relationship with the company in the absence of a specific termination ruling, which in any case would not entail the restitution of compensation according to the principles of contracts involving continuous performance.