The Estonian Supreme Court specified the limits of liability of board members
Partner Pirkka-Marja Põldvere is explaining in the news portal Delfi how the Estonian Supreme Court has specified the limits of liability of board members.
In the decision from 29 March 2017, the Supreme Court established that in certain cases the liability of board members is up to 10 years. Usually the applicable term for any claim against board members is 5 years.
In the given case the shareholders of a private limited company decided to increase the share capital. The claimant paid for the additional shares with non-monetary contribution by transferring his apartment ownership to the company. However, the increase of share capital was unsuccessful and new shares were not subscribed. Despite this fact, the company dispossessed the apartment to a third person. The content of the court dispute was whether the defendants are subject to compensate the value of the apartment to the claimant.
The Supreme Court affirmed that upon failure to subscribe shares, the management of the company must immediately return the contribution and members of the management board are severally liable for it.
The claimant (subscriber) in this court dispute was represented by attorney-at-law Merilin Valdmaa of the LEADELL Pilv Law Office.