The Estonian Supreme Court granted an appeal in cassation filed by the Tax and Customs Board in a dispute concerning the liability of board members. In its judgment, the court has expressed its opinion on a number of important issues related to the liability of board members to the company’s creditors.
If a board member fails to comply with the obligation to file for bankruptcy in the case of permanent insolvency of a private limited company, the Tax and Customs Board may submit a claim arising from the decrease in the value of a tax claim also under the civil law. So far the tax authority has preferred to use administrative liability proceedings to enforce its claims.
The judgment has also a wider significance for all businesses because the Supreme Court explains the grounds for the liability of board members and the opportunities and protective measures available to creditors.
The Tax and Customs Board was represented before the Supreme Court by Elmer Muna, senior associate at TARK GRUNTE SUTKIENE.