Our law firm draws attention to the judgment of the High Court in Olomouc, Case No. 8 Cmo 55/2025, dated August 20, 2025, which defines in detail the conditions under which executive directors guarantee the obligations of a business company "in a state of imminent bankruptcy," in relation to a case whose legal regime is governed by the legislation in force until 2020.

According to the High Court, in such a situation, executive directors are obliged to endeavor to restore the company's operations, secure a crisis manager, or at least negotiate the settlement of claims with creditors. It is not permissible to resign from office and merely appoint a nominee director, a so-called "straw man," i.e., to simply "flee" from the actual management of the company. 

In this specific case, the business involved the operation of a restaurant and boarding house, whereby the court found it proven that the executive directors were aware of the imminent bankruptcy (claims registered in the insolvency proceedings fell directly into the period related to the transfer of business shares/resignation of the executive directors), and it was also evident from the last financial statements that the company was over-indebted. The intent of the executive directors was further evidenced by the fact that they removed all valuable movable assets from the restaurant after operations ceased, and that the new executive director held this position in 80 other companies. According to the court, it was the duty of the former executive directors to verify that the newly appointed executive director possessed the necessary qualifications to perform the office. 

Thus, according to the court, when averting imminent bankruptcy, it is the duty of the executive directors to act with due managerial care. If these duties are not respected, it establishes a sanction consisting of the emergence of the executive directors' personal liability to guarantee the company's obligations (regardless of the limit of the value of such guarantee).

The emergence of the executive directors' liability as guarantors is therefore not altered by the fact that the security deposit from the lease agreement for the restaurant/boarding house was forfeited in favor of the property owner. 

For the aforementioned reasons, according to the court, the company's creditor is entitled to the payment of their claim directly from the executive directors, pursuant to Section 68, Paragraph 1 of Act No. 90/2012 Coll., on Business Corporations, as amended and in force until December 31, 2020 (hereinafter referred to as the "BCA"). Given that the court assessed the matter under the legislation in force until December 31, 2020 (see the amendment to the BCA enacted by Act No. 33/2020 Coll. of February 13, 2020), we note that the currently applicable regulation governing the liability of a governing body in the event of a business corporation's bankruptcy is regulated differently, specifically in Section 66 of the BCA.