Facts
The case concerns a liability action brought by Christoph N., a shareholder of K. Holding AG, against Ernst B., Max N., Josef S., Rudolf W., Armin G., and Ronald K. The plaintiff alleges that the defendants are liable for the sale of two subsidiaries of K. Holding AG at prices lower than their actual value, which allegedly caused harm to the company.
The facts are as follows: in August 1984, K. Holding AG sold two of its subsidiaries. The board of directors of K. Holding AG consisted of Ernst B., Max N., and Josef S. However, Max N. did not participate in the preparation and conclusion of the contracts due to disagreements with the other two members of the board of directors.
In May 1985, Christoph N., the son of Max N., brought a liability action against B., S., W., G., and K. before the Zurich district court. W. and G. were authorized to sign for K. Holding AG at the time of the conclusion of the contracts, and they participated, along with Ronald K., in the preparatory work for the sale of the subsidiaries.
The plaintiff requested that the defendants be jointly and severally condemned to pay approximately 12 million francs to K. Holding AG. The district court dismissed the claim against W., G., and K. for lack of standing to be sued, and this decision was upheld by the Zurich cantonal court of appeal.
Considerations
The decision of the federal court is based on the interpretation of Article 754 paragraph 1 of the Code of Obligations (CO), which states that persons responsible for the administration or management of the company are liable to the company for damages caused by an intentional or negligent breach of their obligations.
The federal court examined the concept of an organ in the material sense according to Article 754 paragraph 1 CO and considered that defendants W., G., and K. could not be considered as organs of K. Holding AG. Indeed, their role was limited to the preparation of the sale of the…