theater Executives Sentenced for Delayed Bankruptcy Filing, Reckless Spending
König-Heinrich-Platz, Germany – Two former managing directors of the theater operating company on the Marientor have been sentenced by a district court for delaying the filing of bankruptcy proceedings despite the theater’s dire financial situation. The court found both men failed in their legal duty to act sooner,contributing to the company’s ultimate collapse.
The first managing director, a 44-year-old from Lindlar, oversaw the theater in 2018 and, despite mounting financial difficulties, authorized a contract to purchase a property in Hesse in October of that year. By the end of the year, the company held a mere €40,000 in liquid funds, and relied on unsubstantiated financing promises.Experts say insolvency proceedings should have been initiated at this point.
His successor,a 57-year-old from Duisburg,took the helm in May 2019 and filed for bankruptcy in October of the same year. Though, before filing, he authorized a further expenditure of €354,000 on advertising for the musical “Wallace,” even as the theater’s financial prospects were demonstrably hopeless.
The 57-year-old admitted in court to lacking experience as a managing director, stating he had placed complete trust in the advice of an auditor and tax consultant responsible for the theater’s financial management.
While the lay judge acknowledged the men’s apparent desire to salvage the company, they emphasized that as managing directors, they bore ultimate responsibility for adhering to legal regulations.
The 44-year-old received a 14-month probationary sentence for delaying bankruptcy. The 57-year-old was sentenced to 16 months probation, factoring in charges of both bankruptcy delay and fraud. The court considered the defendants’ clean records,their confessions,the time elapsed since the offenses (six years),and the significant personal and financial consequences they have already faced.