Financial institutions are not de facto directors of the insolvent company because they do not significantly affect the performance of the insolvent company’s activity, but only ensure that  certain costs do not affect the repayment of their loan.

The insolvent company challenged  the classification of the  credit of the financial  institutions that had granted it a syndicated loan, understanding that this should be subordinate as they were de facto directors. The insolvency administration and the financial institutions objected to the claim, understanding that the circumstances did not  concur for them to be classified as de facto directors of the insolvent company, as they  had not assumed the management  of the company, but only supervised  some  of the  insolvent company’s acts.

The judgment, after recalling that rules on the classification of credits must be subject to restrictive interpretation, made an extensive analysis citing abundant doctrine and case  law regarding the concept of the de facto director. In short, it stated that a  de facto director actively and permanently participates in managing and running a company, and  is not subject to higher spheres of approval or decisions, which therefore performs a true  management role, regardless of the formality of its appointment. In this  case, the insolvent company alleged that the financial institutions, among other  actions,  determined when they should pay invoices and  their order, disposed  of the  balance existing in the account, made drafts of agreements and imposed certain actions  on them.

However, the judge concluded that it was not possible to observe the concept of a de  facto director, as the financial institutions’ role did not involve managing and developing the insolvent company’s business activity (in this case, holding shares for the control of  other companies), but supervising and ensuring the fulfilment of the financing agreement signed with the insolvent company in the defense of its legitimate interests. Thus, the  guidelines of the  agent bank and  the rest of the lending  entities did not affect the insolvent company’s business activity,  but they  supervised the  fulfilment of the  loan  agreement to ensure the appropriate  repayment, and therefore supervised the costs or  actions  of the  insolvent company,  from the perspective of the disposal of money,  informing them these could compromise the repayment of the loan. These actions did not  significantly affect the performance of the insolvent company’s activity. They did not tell  the company what acts of managing, running and developing the business activity it  could carry out, but ensured certain costs did not affect the repayment of their loan.