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21 October 2019
Article 2497 of the Civil Code (on the direction and coordination of companies) sets out several principles relating to the liability of entities that control a group of companies. In particular, Article 2497 provides that companies which provide direction and coordinate their subsidiaries are directly liable to the subsidiaries' minority shareholders for any damages caused to profitability and shareholding value by the violation of fair management principles.
In addition, controlling entities are liable to creditors of their subsidiaries for any damages caused to the integrity of the company's assets. However, if damages are not the result of a controlling entity's direction and coordination activities, it will be exempt from liability in that regard.
Further, under Article 2497bis of the Civil Code, subsidiaries must inform relevant third parties and the competent companies' registry of the direction and coordination activities of controlling entities, so that third parties are aware of them. Company directors who fail to comply with these provisions will be liable for damages connected to the failure to adequately notify minority shareholders and third parties.
In a recent decision (24943 of 7 October 2019) the Supreme Court of Cassation held that:
For further information on this topic please contact Eugenio Vaccari at Grieco e Associati by telephone (+39 06 420 3881) or email (firstname.lastname@example.org). The Grieco e Associati website can be accessed at www.griecoassociati.com.
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