Corporate liability under company law: liability of board members for simulated subcontractor payments and unlawful salary, bonus and expense payments; standing of the assignee creditor after deletion of the company

Facts

Parties and procedural history: The appellants (defendants 1 and 2) were software specialists who, on 12 September 2001, together with other persons, founded [D. AG] , with its registered office in [U.] . They concluded employment contracts with the company on 30 April 2004. The respondent, [C. AG] , is the assignee creditor pursuant to Art. 260 DEBA. The subject matter is an action for corporate liability under company law.

Facts: In 2004 [D. AG] received a mandate for work on the Lötschberg Tunnel (basic mandate, CHF 1,606,896.--). Between 2004 and 2007 the client [E.] issued supplementary mandates with a total volume of CHF 2,465,488.44. On 5 November 2005 [D. AG] passed on part of these supplementary mandates (CHF 452,102.80) to [I. AG] , which had not yet been founded at that time, and transferred a total of CHF 1,980,348.10 to it. It is disputed whether [I. AG] or its subcontractors ([O. AG] , Indonesian [P.] ) carried out the work, or whether the appellants themselves performed the supplementary mandates and the payments were simulated.

Bankruptcy and assignment: Bankruptcy proceedings over [D. AG] were opened on 16 December 2008. The bankruptcy estate assigned claims under Art. 260 DEBA to four creditors. On 4 December 2014 [D. AG] was deleted from the commercial register. By order of 8 November 2011 it was determined that the respondent conducts the proceedings as sole plaintiff.

First-instance judgment (Cantonal Court of Schaffhausen, 11 July 2018): The actions against defendants 3 ([I. AG] ) and 4 ([M. AG] ) were dismissed. The appellants were ordered, jointly and severally, to pay CHF 2,196,626.35 plus 5% interest since 31 December 2007. The court fee of CHF 120,000.-- was imposed one sixth on the plaintiff and five sixths on defendants 1 and 2.

Appellate judgment (Higher Court of Schaffhausen, 31 March 2020): The appellants' appeal was partially upheld insofar as costs and party compensation were concerned (operative paragraphs 1 to 3 and 5 to 6). Otherwise the claim was confirmed: the supplementary mandates had been performed by the appellants themselves; the payments to [I. AG] were simulated and constituted conduct in breach of duty within the meaning of Art. 717 para. 1 in conjunction with Art. 754 para. 1 CO (claim CHF 1,980,348.--). Further awarded were: CHF 97,500.-- for unilateral salary increase without the consent of the overall board of directors, CHF 33,778.35 for unjustified bonus payment, and CHF 85,000.-- for private commuting costs, totalling CHF 216,278.35.

Applications before the Federal Supreme Court: The appellants applied for the judgment to be set aside and the action dismissed, alternatively for remittal to the lower court. The respondent and the lower court applied for the appeal to be dismissed. A request for an oral hearing was made but rejected by the Federal Supreme Court. Suspensive effect was granted by presidential order of 5 August 2020.

Considerations

On standing and deletion from the commercial register (consid. 2): The appellants contested the respondent's standing, arguing that after deletion from the commercial register the company was no longer the holder of the claims and re-registration would be required (referring to judgment 4A_384/2016). The Federal Supreme Court held that after an assignment under Art. 260 DEBA, the deletion of the company has no effect on the standing of the assignee creditors and no re-registration is necessary (judgment 4A_19/2020 of 19 August 2020). The objections therefore fail.

On procedural complaints (consid. 3): The Federal Supreme Court applies the law ex officio, but only to adequately substantiated complaints (Art. 106 para. 2 FSCA, Art. 42 para. 2 FSCA). The complaint of manifest misrepresentation of the file and incomplete findings of fact regarding research mandates (Gotthard Tunnel) was dismissed, as the parties had only asserted the Lötschberg Tunnel. The complaints regarding the incomplete evidentiary order failed for lack of material prejudice and insufficient reasoning. The refusal to take into account a letter of 6 September 2018 and the annual accounts of [O. AG] was rightly upheld, as it is not the court's task to piece together the factual presentation from exhibits (judgment 4A_447/2018 of 20 March 2019 consid. 5.1.2). The complaint regarding the non-admission of supplementary questions and the consideration of criminal proceedings (Art. 53 CO) was likewise dismissed as insufficiently substantiated or merely appellate in nature.

On the burden of qualified denial (consid. 3.7): A qualified denial may be required where the denying party has knowledge of the facts from its own acts and there is an information asymmetry (BGE 133 III 43 consid. 4.1). The appellants alone had negotiated the supplementary mandates as employees and were the principal obligors responsible for their performance. They should therefore have specifically named the persons actually performing the work. As only [P.] was named, but was undisputedly not active, the lower court could permissibly assume without arbitrariness that the appellants performed the work themselves. The alternative reasoning did not need to be examined further.

On liability (consid. 4): The characterisation as simulation is not material to liability; decisive is that the appellants performed the work themselves and…