March 2020

Judgment of the Athens Court of First Instance on the Conservative Seizure of a Limited Partner's Assets

By decision No. 1747/2020 of the Athens Single Judge Court of First Instance, issued on an application for interim measures for the imposition of a conservative seizure on behalf of our client, it was held that the partial repayment of the total debt of a limited partnership by payment of sums of money from the bank account of the general partner of the partnership establishes his liability for the total debt of the partnership. This is despite the fact that, in principle, the general partner is not liable for the debts of the partnership pursuant to Article 279 of the Law of the Republic of Hungary. 4072/2012. More specifically, the above decision held that the bank account of the general partner was used for the collection of the partnership's revenues, with the aim of preventing the corporate creditors from seizing them due to the status of the account holder as a general partner. However, given (a) that the said practice resulted in the loss of the corporate creditors (including our client), and (b) that the use of the bank account was made with the knowledge of the beneficiary of that bank account as a general partner to pay off the corporate debts, the Court held that such assistance by the general partner constituted conduct contrary to good morals, which gives rise to his liability to compensate the corporate creditors under Article 919 of the CC.