The judgment in Vilsmeier makes fascinating reading, not only for legal issues it discusses, but also for its Hollywood fact pattern involving Kazakh “specialists” allegedly dispatched by an Austrian bank to the plaintiff’s home in Switzerland to deal with “the Vilsmeier problem”, perceived kidnap attempts on the plaintiff’s 11-year-old daughter, and spies on the companies’ boards (apparently). As a result, the plaintiff, the former chairman of the two defendant companies, incurred hundreds of thousands of euros of security costs to hire bodyguards, upgrade his house and rent an armoured Audi A6, at the expense of the companies.
This article however focuses on the two legal topics considered: (i) directors’ fiduciary duties under Article 74 of the Companies (Jersey) Law 1991 (Companies Law); and (ii) the Court’s discretion to grant relief from liability for breach of duty under Article 212 of the Companies Law.
Article 74(1) of the Companies Law sets out the general duties of directors, being to:
(a) act honestly and in good faith with a view to the best interests of the company; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.