Personal Liability Claims Against Directors Following Criminal Convictions in a Financial Services Co-operative

We represented the former board members of a Hungarian financial services co-operative in civil proceedings brought by numerous investors seeking to hold the directors personally liable for the co-operative’s liabilities. Prior to the civil proceedings, the directors had been convicted in related criminal proceedings and received custodial sentences of eight years and six years of imprisonment, respectively. Notwithstanding those convictions, we successfully demonstrated that the criminal conduct had been committed to the detriment of the co-operative itself rather than for the directors’ personal benefit. As a result, the legal prerequisites for imposing personal liability on the directors for the co-operative’s debts were not satisfied. The investors’ claims were therefore dismissed, preventing the directors from being held personally liable for liabilities with a total value of approximately EUR 30 million.