Assistance with DGA dismissal and debt restructuring

Questioner

Years ago, together with a partner, I started a partnership. This later became a private limited company. In recent years, we have increasingly gone deeper into the red and we could only survive if the turnover continued to some extent (trying to eliminate arrears with the monthly turnover). The debt burden with the banks exceeds the remaining stock/inventory and debtors. Even the creditors are still more than the debtors. We have remained jointly and severally liable in the private limited company (condition of the banks). The company is on its deathbed. So far, we have managed to make ends meet every month by barely taking on management fees ourselves and stringing along suppliers. Can I resign as a managing director myself? Due to the now very skewed relationships, it is no longer a workable situation. I want to leave, even if that means that I lose everything (house, etc.) and I end up in debt restructuring... what to do? I cannot request information elsewhere because I do not have the money for it (I am already happy if I can take out €800.00 per month).

Lawyer

Dear Questioner, If you choose to do so, you can submit a unilateral resignation by means of a letter addressed to the company. So the co-director/partner in your case. Do not forget to deregister yourself from the Trade Register of the Chamber of Commerce. However, resignation does not release you from your liability towards the bank. You are jointly and severally liable and that means that if the company cannot repay the debt to the bank, the bank may call on your private assets. Furthermore, it is still possible that you can be held liable by creditors of the company on the basis of directors' liability. This is possible, for example, in the event of improper performance of duties or serious culpable conduct. Therefore, be careful when entering into new contracts or extending them and ensure that you can demonstrate that you have performed your duties properly as a director. After all, you can be held liable if you know or should reasonably understand that the company would not be able to meet its obligations or would not be able to do so within a reasonable period of time. My advice is to make arrangements with the bank and creditors and ultimately (if continuation is impossible) to file for bankruptcy. You can then submit a request for statutory debt restructuring to the court.