Insolvency proceedings do not only aim at the reorganization or liquidation of a company’s assets, but also at establishing the liability of the persons who contributed to the insolvency. One of them is the special administrator, who represents the associates or shareholders during the procedure.

When can the special administrator be held liable?
According to Article 169 of Law no. 85/2014, the syndic judge may order that part of the debtor’s liabilities be borne by the persons who contributed to the insolvency through serious acts.
In the case of the special administrator, liability may arise in situations such as:

• continuing a loss-making activity, even though it was obvious that the company was recording losses;
• accepting incomplete financial statements or hiding accounting documents, preventing a proper assessment of the assets;
• using the company’s assets for personal or third-party interests;
• favoring certain creditors to the detriment of others;
• contracting obligations that unjustifiably increased the liabilities.

Consequences for the special administrator
Liability means the obligation to cover the company’s debts, in whole or in part, with his own assets. In addition, the special administrator may face a ban on holding management positions for a certain period and even criminal liability in serious cases, such as fraudulent bankruptcy.