In its judgment 6B_1211/2023, the Federal Supreme Court reversed its case law on unfair management. A concealed distribution of profits by the body of an over-indebted company to another body, shareholder, or third party constitutes the objective elements of unfair management. According to this case law, a reduction in the company’s gross assets is sufficient for an offense of unfair management to be established.
A is the sole shareholder and chairman of the board of directors of C SA. In September 2010, the company had negative equity of CHF 480,000 and outstanding debts of CHF 609,000, indicating proven over-indebtedness. In this context, the X group began discussions with a view to acquiring a stake in C SA. To this end, several loans were granted to the company, totaling CHF 200,000 and EUR 320,000.
Despite the state of over-indebtedness, A paid himself a salary of CHF 5,000 per month, charged the company for the costs of two luxury vehicles and a luxury apartment, and made private withdrawals totaling CHF 252,907 in six months. These funds were used for personal expenses. X SA was declared bankrupt in May 2011, with third-party claims amounting to CHF 2,486,381.
Under Swiss law, a public limited company has its own assets, separate from those of its governing bodies. Any concealed distribution of profits and any disposal of the company’s assets for the benefit of a governing body or shareholder constitutes an unlawful act that may constitute unfair management.
As unfair management is a result-based offense, it was established in case law that only an attack on the company’s net assets fulfilled the objective elements of the offense. Thus, the Federal Court had previously held that damage to net assets was impossible in the case of an over-indebted company, so that a criminal conviction would not have been possible in this case.
In its ruling 6B_1211/2023, the Federal Supreme Court reversed its case law, which led to the conviction of the defendant. It held that withdrawals made by a body from the assets of an over-indebted company frustrate the right to repayment of the company’s creditors who have advanced funds. To that extent, such conduct constitutes a serious breach of the legal order, which falls under the criminal provisions punishing unfair management.
Consequently, it is now accepted that damage to a company’s gross assets is sufficient to constitute the objective elements of unfair management, which considerably broadens the practical scope of such convictions, since it is most often in the case of an indebted company that such acts will lead to the filing of a criminal complaint.
Finally, it should be noted that this offense is ideally combined with bankruptcy offenses.
