Facts
The case concerns a public limited company, P. AG, whose former administrators, F. and M. S., are being prosecuted for liability under Article 752 and subsequent articles of the Swiss Code of Obligations (CO). The company granted a significant loan to its main shareholder, E. S., without collateral. The administrators resigned in December 1972. The company went bankrupt in August 1975. The plaintiff, M., brought an action against the former administrators, alleging that they had breached their duties by allowing the granting of an unsecured loan.
The cantonal courts dismissed the claim, considering that at the time of the administrators' resignation, the company's claim was still covered by the borrower's private fortune and that the administrators had not committed any fault. The plaintiff appealed to the Federal Court.
Considerations
The Federal Court examined the question of whether the administrators had breached their duties by allowing the granting of an unsecured loan. It considered that administrators have the obligation to ensure that the company can fulfill its obligations and conserve the necessary means for this purpose. Article 722 paragraph 1 of the CO requires administrators to exercise all due diligence.
The Federal Court also examined the question of causality between the alleged fault and the damage suffered by the company. It…