Liability of Holding Companies

Date: 13/01/2010

Pietro Cavasola , Peter Huber , Dr Alexandra Schluck-Amend , Atanas Bangachev , Carl Leermakers , Stefan Brunnschweiler LL.M. , Dr Max H. Albers-Schönberg LL.M. , Helen Rodwell , Robert Hayhurst , Jacques Isnard , Martin Mendelssohn , Mr. Carlos Peña Boada , Roman Tarlavski

In these times of economic downturn we see more and more companies restructuring their organisations and facing liability issues with respect to their activities in different jurisdictions. The trend to centralise management functions in a holding company, with directors of holdings also serving as directors of affiliates, increases the risk of liability issues to a considerable extent.

This emphasises the importance of adopting a good governance model within the groups and gives lawyers an important role in advising on liability issues both with respect to transactions and with respect to contentious matters arising from violation of the corporate rules or from third parties' actions.

In this context, the CMS Corporate publication “Liability of Holding Companies” is an excellent piece of know-how to help clients assess the liability of a holding company for the behaviour of an affiliate, for instance when the latter is insolvent.