Burden of Proof in the Case of Missing Amounts in Company’s Accounts

With ruling no. 25631 of September 1, 2023, the Court of Cassation has reviewed the burden of proof between the directors and the company in the case of cash shortages.

If the company presents that the sums have been dispersed or misappropriated, the directors have to prove that they have spent the sums exclusively in the interest of the company.

According to the Court of Cassation, the liability of directors for damages caused to the company is of a contractual nature, and therefore, the company or the appointed curator in the case of an action brought under art. 146 of the Italian Bankruptcy Law (now regulated under art. 255 of the Business Crisis Code), has to prove that the directors have not fulfilled their duties as well as the existence of a causal link between the violation committed and the damage suffered. On the other hand, the directors have to prove that they fulfilled their duties correctly.

Hence, in case of amounts taken without apparent justification from the company’s assets, the company, when filing a compensation claim against the director, can limit itself claim a violation of the directors’ obligations consisting in the  misuse or dispersion of assets, while the directors would have to prove that they fulfilled their obligations properly, by using the company’s funds for the extinction of liabilities of the company or their use for the conduct of social activities in accordance with the by-laws and the law.