The Over-Indebted Single-Person AG as Victim of Unfaithful Management
BGE 151 IV 258 — the Federal Supreme Court overrules its earlier approach and holds that an over-indebted company can still be harmed when its assets are reduced contrary to duty.
In early 2025, the Swiss Federal Supreme Court abandoned a line of reasoning it had pursued as recently as 2021: an over-indebted company, it had suggested, could not be harmed in the sense of Art. 158 StGB by a director’s breach of fiduciary duty, because there was no net equity left to damage. In BGE 151 IV 258, the Court holds the opposite. The company’s assets — not its net equity — are what the statute protects. A company may be over-indebted and still be harmed, within the meaning of the offence, when its assets are further reduced through a director’s breach of duty. The practical implication for boards, particularly for the closely-held and owner-managed Swiss companies in which the earlier reasoning had sometimes been treated as a defence, is material.
The facts
A.A. was sole shareholder and sole director of C. AG, a Swiss AG whose liquidity problems had persisted for years. By late September 2010 the company was over-indebted. Through the following months, A.A. took a monthly salary of CHF 5,000 from the company and had it finance his luxury residence and two luxury cars. He made additional private credit-card charges and cash withdrawals totalling approximately CHF 253,000 between October 2010 and February 2011, booking them in the company’s accounts as business expenses — predominantly as Montageaufwand. The company’s auditor resigned in February 2011; no successor was appointed; in May 2011 the cantonal court dissolved C. AG under Art. 731b OR and ordered liquidation in bankruptcy. Creditor claims of roughly CHF 2.5 million had accumulated.
At first instance, A.A. was convicted of qualified unfaithful management under Art. 158 Ziff. 1 Abs. 3 StGB. The Obergericht of the Canton of Solothurn re-qualified the offence as an attempted qualified unfaithful management: following the Federal Supreme Court’s earlier decision in 6B_1422/2019, the appellate court reasoned that the company, being over-indebted with neither equity nor reserves, could not in fact have been harmed within the meaning of the offence. What remained was at most a factually impossible attempt.
The holding
The Federal Supreme Court dismissed A.A.'s appeal on other grounds (including the procedural rule against reformatio in peius), but in the course of doing so departed from the reasoning of 6B_1422/2019 in a deliberate change of practice (Praxisänderung). The Court’s own summary is blunt: that earlier view “cannot be maintained.”
The Court’s reasoning tracks the ordinary concept of Vermögensschaden. Following BGE 147 IV 73, BGE 142 IV 346, and earlier authority, a company suffers a pecuniary harm whenever its assets are reduced, its liabilities increased, or a present or future asset fails to accrue. Net equity is not the metric the statute uses. A company whose liabilities exceed its assets is no less a victim of theft or fraud by its director than a solvent company is; the offence of unfaithful management operates on the same logic. The Court adds two contextual observations: that over-indebtedness may be temporary, and that where the company subsequently enters bankruptcy, the creditor-protective offences of Art. 163 ff. StGB can apply in concurrence with Art. 158.
The Court is careful to preserve the narrow exception the earlier jurisprudence had carved out: a sole owner’s disposition of assets within the share capital and restricted reserves — i.e., where the company’s net equity is in fact adequate and the shareholder’s consent genuinely substitutes for an absent third-party protection interest — is not criminal unfaithful management (see BGE 117 IV 259, BGE 141 IV 104). But where the company is over-indebted or where the share capital and restricted reserves are not fully covered — as was the case here — that exception does not run. The shareholder’s consent cannot displace the interests of creditors in the company’s substance.
Why it matters for boards
Three practical consequences follow, each material to the reference articles in Director Duties under Swiss Law and Corporate Criminal Exposure.
The sole-shareholder defence is narrower than often assumed. The Court reiterates a point that has long been Swiss doctrine but is often informally resisted in practice: the Swiss stock corporation, even as a single-person AG, is a distinct legal person from its owner-director. The assets of the company are not the shareholder’s assets. Dispositions that treat them as such are, at the margin of solvency, criminal.
Over-indebtedness is not a licence. The argument — attractive, even in respectable counsel’s mouths — that an already over-indebted company cannot be “further” harmed does not survive this decision. Boards and directors operating close to or past the solvency margin should assume that every extraction, every booking that conceals a private charge, every transfer to an affiliate at non-arm’s-length, is subject to full criminal review under Art. 158 StGB independent of any insolvency-related offence.
Closely-held Swiss companies bear the weight. The decision is most significant in the segment of Swiss corporate practice where the distinction between owner and company is frequently blurred — closely-held AGs, family-owned entities, single-shareholder holdings. The governance discipline the decision implies is not novel: treat the company’s assets as the company’s. What is novel is the Court’s firm closure of a doctrinal window through which that discipline had sometimes been evaded.
Implications for the reference work
Director Duties under Swiss Law, at §3 (duty of loyalty — primary beneficiary), will be updated to reflect this decision. The discussion of sole-owner transactions in particular should now make the narrowing of the BGE 117 IV 259 exception explicit.
Corporate Criminal Exposure, at §4 (director exposure alongside the company), will be updated to reflect the overruling of 6B_1422/2019 and the clarified relationship between Art. 158 StGB and the creditor-protective offences of Art. 163 ff.
Primary source
Full decision at opencaselaw.ch (BGE 151 IV 258). Related authorities cited: 6B_1161/2021, 6B_1422/2019 (overruled on this point), 6B_85/2021, BGE 117 IV 259, BGE 141 IV 104, BGE 147 IV 73, BGE 142 IV 346.