Attorneys for German Corporate Law in Kaiserslautern

Facts: The plaintiff, Sparkasse Südwestpfalz (as the legal successor to Stadtsparkasse Zweibrücken), claimed damages from its former CEO in Zweibrücken. The defendant had granted a customer ("R") massive account overdrafts and loans over years (total volume over 1 million euros), although no adequate collateral was provided and internal competence rules (approval of the credit committee) were disregarded. The board member relied unchecked on the customer's statements regarding allegedly upcoming real estate sales that were never realized.

Key Norms:

• Sec. 18 KWG: Creditworthiness check (Obligation of the bank to have the economic circumstances of the borrower disclosed).
• Sec. 14 SparkG Rh.-Pf.: Duties of care of the board (Management on own responsibility observing the "diligence of a prudent and conscientious manager").
• Sec. 93 AktG / Sec. 43 GmbHG (analogous): Statute of limitations (The court applied the short limitation period of 5 years applicable to corporations to the savings bank board member as well).

Decision: The Higher Regional Court (OLG) Zweibrücken ordered the ex-board member to pay approx. 323,000 euros to Sparkasse Südwestpfalz, but dismissed the rest of the lawsuit. The court indeed confirmed massive breaches of duty by the defendant in all nine credit decisions in dispute (violation of Sec. 18 KWG, disregard of lending limits). However, the plea of the statute of limitations applied to the earlier cases. The court decided that the short 5-year limitation period of corporate law (instead of the then-usual 30 years) also applies by way of analogy to public-law savings banks, in order to avoid an unjustified tightening of liability compared to board members of GmbHs/AGs. Only the actions after December 1996 were not yet time-barred.

Conclusion: Savings bank board members are personally liable for damages from lending if they fail to conduct creditworthiness checks (Sec. 18 KWG) or disregard committee reservations. Contributory negligence by the bank (e.g., lack of supervision) does not exonerate the board member in the case of intentional action. Crucial for practice: The liability of savings bank board members is subject to the short 5-year limitation period analogously to stock corporation/GmbH law.

Facts: 1. Fußball-Club Kaiserslautern e. V. sued former board members for damages. They had concealed secret supplementary contracts with players from the DFB/DFL during the licensing procedure. The consequences were a heavy fine and a points deduction, which led to massive revenue shortfalls in television money.

Key Norms:

• Sec. 27 Para. 3 BGB in conjunction with Secs. 664, 670 BGB: Basis of liability (Board member is liable like an agent for breaches of duty).
• Sec. 112 AktG (analogous): Representation in litigation (The supervisory board represents the association in lawsuits against (former) board members).
• Sec. 315 BGB: Review of equity (The association penalty imposed by the DFL is subject to judicial review for equity).

Decision: The German Regional Court (LG) Kaiserslautern ordered the ex-board members to pay over 500,000 euros. The court evaluated the behavior as a grossly negligent breach of duty in accordance with the norms mentioned above. The defendants' objection that they had relied on employees ("division of responsibilities") did not take hold: Correct licensing is an unassignable core task of the board.

Conclusion: Board members are personally liable for damages (incl. association fines and revenue losses) caused by faulty licensing documents. They cannot exculpate themselves in the case of elementary core duties by delegating to third parties.

Facts: A GmbH located in Kaiserslautern took recourse against its lawyers. The background was a liability lawsuit against the former managing director of the GmbH in Kaiserslautern, who had breached his supervisory duties (embezzlement by an employee, convicted by the AG Kaiserslautern). The accusation against the lawyers was that they had overlooked an exclusion period (Sec. 70 BAT) agreed upon in the employment contract, as a result of which the claims against the managing director had expired.

Decision: The German Regional Court (LG) Kaiserslautern dismissed the recourse action. The lawyer's mistake (overlooking the deadline) caused no damage because the exclusion period in the employment contract was invalid from the beginning. The contract in Kaiserslautern was only signed by the Chairman of the Supervisory Board. For a valid limitation of liability, however, the mandatorily required resolution of the competent body (shareholders' meeting or entire Supervisory Board) was missing. Without this resolution, the Chairman had no power of representation to validly agree on this clause.

Conclusion: Agreements on liability reliefs (such as exclusion periods) in employment contracts of German GmbH managing directors are invalid if they are not covered by a formal resolution of the competent body; the sole signature of the Chairman of the Supervisory Board is not sufficient. In lawyer recourse, overlooking such an invalid deadline does not lead to liability, as the original claim against the managing director legally persists.