Misuse of company assets (abus de biens sociaux) in the Cour de cassation: the offence, limitation, related offences and the minority action

The judgments

The question

Luxembourg company law has its own criminal code in Title XV of the Law of 10 August 1915 on commercial companies. Its centrepiece is the offence of misuse of company assets (abus de biens sociaux): a director, de jure or de facto, who in bad faith uses the company’s property or credit in a way he knows to be contrary to its interests, for personal purposes or to favour another business in which he has an interest. Around it sit offences of forgery in the balance sheets, failure to publish accounts and, in the Commercial Code and the Criminal Code, fraudulent bankruptcy and money laundering. For founders, family-office principals and group CFOs, the practical questions are concrete. Is a debit balance on a shareholder’s current account a crime? Does it help that everything was booked openly? When does the limitation period start if the only shareholders are the director’s relatives? And if the people running the company will not act, can a minority shareholder take the matter to an investigating judge?

The four judgments of the Cour de cassation (Court of Cassation, the highest court in civil and criminal matters) reviewed here answer those questions. The longest, of 21 December 2023, concerns 842 collector’s watches paid for by companies controlled by one man and his family. A shorter judgment of 18 June 2020 deals with a director who moved a company car into his own name weeks before the company went bankrupt and entered fictitious staff costs in its balance sheet. Two judgments of 2026 then deal with the shareholder as complainant: on 4 June 2026 the Court held that the minority action of Article 444-2 can be brought before the criminal courts, and on 8 October 2026 it confirmed that a shareholder suing in its own name cannot claim the loss in value of its shares. Each file contains the conclusions of the Advocate General (avocat général) of the Parquet général, which we use where they add to the judgment.

The legal framework

The offence of misuse of company assets: Article 1500-11 (former Article 171-1)

The 1915 Law was renumbered in 2017. The offence was introduced into the Law by the Law of 21 July 1992 (AG Kersch in the 2023 case, p. 69), taking as its model, according to the Advocate General in the June 2026 case, the French offence in Article 437 of the French Law of 24 July 1966 on commercial companies (AG Hilgert, p. 12, footnote 6). The 2023 judgment applies it under its old number, Article 171-1; the Court of Appeal in that case described it as “incriminated by Article 1500-11 … (former Article 171-1)” and quoted the penalty as imprisonment of one to five years and a fine of €500 to €25,000, or one of those penalties only (Cour de cassation, 21 December 2023, pp. 11 and 28). The October 2026 judgment cites Article 1500-11 directly; the June 2026 judgment refers to “the criminal provisions of Articles 1500-1 et seq.”.

Our current text of Article 1500-11 provides that “de jure or de facto company officers who, in bad faith,” have done either of two things are liable to that penalty: under point 1°, made use of the company’s property or credit “in a manner which they knew to be contrary to its interests, for personal purposes or to favour another company or undertaking in which they had a direct or indirect interest”; under point 2°, made the same kind of use of “the powers they held or the votes at their disposal in that capacity” (abus de pouvoirs). The penalties in our text are those the Court of Appeal quoted in 2022.

The Court of Appeal in the 2023 case broke the offence down into four elements, which the Cour de cassation did not question: (a) the status of company officer; (b) a use of the company’s property or credit; (c) that is contrary to the company’s interest; and (d) the pursuit of a personal interest, with a conscious use in bad faith (Cour de cassation, 21 December 2023, p. 11).

Forgery in the balance sheets and failure to publish accounts

The 2020 judgment applies two other offences of the 1915 Law under their old numbers. Forgery in the balance sheets was in Article 169; the Court of Appeal described that offence as “currently punished by Article 1500-8” (Cour de cassation, 18 June 2020, p. 8). Our current text of Article 1500-8 punishes, with criminal imprisonment (réclusion) of five to ten years and a fine of €5,000 to €250,000, persons who with fraudulent intent or intent to cause harm commit forgery in the balance sheets or the profit and loss accounts required by law or the articles, among other ways by “fabricating agreements, provisions, obligations or discharges” (point 3°). Article 1500-9 treats a person who uses such a forged document as the forger, and Article 1500-10 provides that the balance sheet exists for these purposes as soon as it is submitted for inspection by the shareholders.

The failure to publish annual accounts was charged under Article 163, point 3°. The judgment gives no current number for it. In our current text, Article 1500-2, point 2°, penalises managers or directors who have failed to have the annual accounts and related documents published in breach of, among others, Article 79 of the Law of 19 December 2002, and Article 1500-5, point 2°, penalises more heavily a failure to publish “for a fraudulent purpose”. Our translation of Article 79 of the 2002 Law still refers, in its paragraph 1bis, to “Article 163, point 3°” of the 1915 Law. Under paragraph 1 of Article 79, the approved accounts of the companies listed in Article 77 must be published within one month of approval and “no later than seven months after the end of the financial year”.

Directors’ liability and the company action: Articles 441-9, 442-10, 442-16 and 444-1

Under Article 441-9, directors of a société anonyme are liable to the company for the performance of their mandate and for misconduct in their management, and are jointly and severally liable, to the company or to third parties, “for all damage resulting from infringements of this Law or of the articles of association”. Article 442-10 and Article 442-16 say the same of the members of the management board and the supervisory board in a two-tier company, and under Article 710-16 the managers of a private limited company are liable in accordance with Article 441-9. The decision to sue is normally the general meeting’s: under Article 444-1, a general meeting “that has decided to bring the company action” against the directors may entrust one or more agents with carrying out that resolution.

The minority action: Article 444-2 (former Article 63bis)

Article 444-2 was introduced as Article 63bis by the Law of 10 August 2016 modernising the 1915 Law (AG Hilgert, p. 13). In our translation:

• an action “may be brought on behalf of the company against the directors or members of the management board or of the supervisory board, as the case may be, by minority shareholders or holders of beneficiary units (parts bénéficiaires)”;
• that minority action is brought by one or more shareholders or holders of beneficiary units who, “at the general meeting that decided on the discharge”, held voting securities “representing at least 10 per cent of the votes attaching to all those securities”.

The Cour de cassation quoted the same text in its June 2026 judgment (p. 4).

Who may complain to the investigating judge: Article 56 of the Code of Criminal Procedure

A victim can set a criminal case in motion by filing a complaint with the investigating judge and joining it as a civil party (plainte avec constitution de partie civile). Article 56 of the Code of Criminal Procedure, quoted by the Court on 4 June 2026 (p. 4), provides that “any person who claims to have been harmed by a crime or a délit may, by filing a complaint, join the proceedings as a civil party before the competent investigating judge”. The courts treat this as an exceptional right, strictly confined to the limits of Article 56, and require proof of the possibility of a personal and direct harm caused by the offences denounced; whether a complainant meets that test is, as the Court held on 8 January 2026, no. 09/2026, a matter for the sovereign assessment of the trial judges (AG Hilgert, p. 21, citing that judgment and Cour de cassation, 9 December 2021, no. 149/2021, and 20 November 2025, no. 159/2025).

Other provisions cited

Limitation is governed by Articles 637 and 638 of the Code of Criminal Procedure; under Article 638, as reproduced by the Advocate General in the 2023 case, the period for a délit is five years (AG Kersch, pp. 35–36). Fraudulent bankruptcy is defined in Article 577 of the Commercial Code and punished under Article 489 of the Criminal Code; laundering is defined in Article 506-1 of the Criminal Code, and Article 506-4 makes it punishable also where the launderer committed the predicate offence; confiscation is governed by Article 31 of the Criminal Code. None of these is in our translations.

Cour de cassation, 21 December 2023, no. 152/2023: 842 watches and a family group

Facts

The defendant was the de jure or de facto director of a group of companies whose shareholders were all members of his family (Cour de cassation, 21 December 2023, p. 4, quoting the Court of Appeal). A collector, he admitted that he had personally chosen and ordered 842 collector’s watches from jewellers and that they had been paid for by 18 of his companies. The Court of Appeal distinguished three categories of payment (p. 12):

• payments for watches he acquired, booked as expenses (charges) in the companies’ accounts;
• payments for watches he acquired, booked at the end of the financial year, before the annual accounts were filed, as a debit on his shareholder’s current account with the paying company;
• the payment by one company, SOCIETE2.), of 319 watches which, according to the defendant, it had bought as an investment and which remained on its balance sheet under “other securities” (autres valeurs mobilières).

The prosecution had argued that part of the 319 watches had been charged to his current account, for €2,047,495, relying on an expert report of 14 February 2017 that identified 45 operations for €2,047,495.36 booked directly to the current account. The Court of Appeal found that the report described these as private expenses without further detail, so that it was not established that they related to watches; the 319 watches were therefore treated as booked on the balance sheet, where the item stood at €6,559,734.50 at the end of 2009. The prosecution put the payments for the 319 watches at €6,973,088.11, and the defendant himself put their price at €6,973,087.95 (pp. 12–13). On a search of his home on 20 September 2011, 643 watches were seized; the Court of Appeal accepted, as his lawyers had explained, that the 319 watches financed by SOCIETE2.) were among them. A police witness stated on oath that the watches were not in their boxes, which were too big for the drawers (p. 12). The offences ran from 24 February 2004 to 28 December 2011 (p. 32).

The lower courts

The tribunal d’arrondissement (district court) of Luxembourg, sitting in criminal matters, acquitted the defendant of misuse of company assets (former Article 171-1, now Article 1500-11) and laundering in respect of the 319 watches on SOCIETE2.)’s balance sheet and ordered their return to that company. It convicted him of misuse of company assets and laundering by holding (blanchiment-détention) for the 523 watches bought for himself with funds of the other companies, imposed a fully suspended prison sentence and a fine, and confiscated those watches (p. 2). According to the Advocate General, the sentence was two years, fully suspended, and a fine of €250,000 (AG Kersch, p. 34).

On appeals by the defendant and the prosecution, the Cour d’appel (Court of Appeal), tenth chamber, by judgment no. 227/22 X. of 13 July 2022, also convicted him of misuse of company assets for the payments by SOCIETE2.) and of laundering by holding the 319 watches, ordered their confiscation, reduced the prison sentence to one year, fully suspended, “in view of the gravity of the facts, but above all in view of their age”, confirmed the fine of €250,000 and confiscated all the watches seized as property substituted for the object of the offence (pp. 2 and 29–30). It also held that the alternative fine of €3,740,000 which the district court had imposed in case the confiscation of 187 watches not in the hands of the justice system could not be executed had no legal basis under Article 32(4) of the Criminal Code (AG Kersch, p. 72).

The defendant appealed to the Cour de cassation on ten grounds. A family wealth management company (SPF), formerly a société anonyme, appeared as civil claimant and defendant in cassation; the judgment does not discuss its claims.

Limitation: the first and second grounds

The defendant argued that facts before 20 September 2007 were time-barred. The Court of Appeal set out the following rules (pp. 2–5). The Law of 6 October 2009 extended the limitation period for délits from three to five years for offences committed after its entry into force on 1 January 2010, and the Law of 24 February 2012 applied the five-year period to earlier offences not already time-barred. The period runs in principle from the day the offence is complete. The facts were not a single collective offence, because the companies used and the ways the purchases were booked differed. For clandestine offences, among which the Court of Appeal counted misuse of company assets (citing its own judgment no. 11/20 X of 15 January 2020), the starting point is postponed to the day the offence “appeared and could be established in conditions permitting the exercise of the public prosecution”. In the absence of concealment in the accounts, that is the date on which the annual accounts charging the expenses to the company are presented to the members for approval. The Court of Appeal then added:

However, the position is different where the director is, together with members of his family or with legal persons that he controls directly or indirectly, a member or shareholder of the company he manages. … In such a case, one cannot expect any of these persons to denounce accounting irregularities or facts constituting misuse of company assets from which he or she stands to benefit directly or indirectly. The mechanism of effective review of the company accounts by the general meeting of shareholders is then excluded.

It therefore set the starting point at the day the prosecution learned of the offences, “without it being necessary to analyse whether the operations in question were concealed”. For six companies that was 28 September 2010, the date of a report by the Administration des contributions directes (ACD, the direct tax authority) to the public prosecutor; limitation was interrupted by the prosecutor’s request to open a judicial investigation on 20 December 2010 or, for one company, by an additional request of 24 October 2011. For ten other companies the offences came to light in the course of the investigation, and the additional request of 24 October 2011 was the first interrupting act (pp. 4–5).

The grounds attacked this reasoning in five branches. The first argued that a family shareholding does not by itself allow a court to presume that the other members approved or passively connived, where only one of them is accused and nothing was concealed. The Court answered that the trial judges had found, by a sovereign assessment, that because of the family ties between the defendant and the shareholders “any effective review of the company accounts by the general meeting was excluded”, and had deduced from this “that the offence was to be regarded as occult or clandestine”; they could therefore, without breaching Articles 637 and 638, postpone the starting point to the day the offence could be established in conditions permitting prosecution (p. 6). The second branch (insufficient findings of fact) failed for the same reason (p. 7).

The third branch argued that the ACD had decided to report to the prosecutor only a year after drawing up its reports on three of the companies, although Article 23(2) of the Code of Criminal Procedure and Article 16 of the Law of 19 December 2008 on administrative and judicial cooperation require any authority that learns of a crime or délit to inform the prosecutor without delay. The Court held this branch inoperative: whatever date was taken, the judgment showed that limitation had been interrupted by the first request of 20 December 2010 (p. 7). The fourth branch (no answer to point 84 of the defence submissions on the ACD’s delay) failed because that point merely mentioned Article 23(2) “without drawing any argument from it”, so it called for no answer (p. 7). The fifth, on the lack of detail about the investigative measures, was rejected as well (p. 8). The second ground, which complained that the Court of Appeal had ignored arguments that the facts could have been discovered in earlier tax audits, in VAT returns filed with the AED or from the list of debts annexed to the defendant’s own income tax returns, failed because, once the offence had been classed as clandestine, examining those arguments was superfluous (p. 11).

The Advocate General traced the rule to French case law. From a judgment of 7 December 1967 the French criminal chamber set the starting point on the day the offence appeared and could be established; from 5 May 1997 it held that, unless there was concealment, time runs from the presentation of the annual accounts; but it then adopted a broad notion of concealment, which may be “passive” where the persons able to set a prosecution in motion are unaware of the facts, and it had accepted that concealment could follow from the fact that the company was owned by the defendant’s family because “no member had an interest in revealing it to the judicial or police authorities” (AG Kersch, pp. 36–39). She added that knowledge by other persons does not start the period, since only the prosecutor and the shareholders can set a prosecution in motion, and that where the persons who discover the facts are under a duty to report them, French law takes the date of the report (p. 43). She also noted that the absence of civil claims by the companies harmed showed the strong understanding within the family (p. 39).

The company’s interest and shareholder current accounts: the third ground

The third ground concerned the watches booked to the defendant’s current account. The Court of Appeal had reasoned as follows (pp. 11–14). Misuse of company assets is an instantaneous offence, complete on the day of the use, that is, of each payment, and not on the day the accounts are approved; its existence is “not erased by later repayment or by a later regularisation of an accounting entry”. A debit balance on a shareholder’s current account is not prohibited in Luxembourg but may, depending on the circumstances, constitute the offence. Because the risk is assessed at the time of each payment, it did not matter that the current accounts had borne interest at 5% a year throughout the criminal proceedings, or that the companies had stayed solvent; the defendant’s attempts at repayment, set-offs and the assignments of the debit balances to SOCIETE23.) Ltd on 31 December 2010 had no bearing on the criminal classification. The flows and entries were transparent and nothing was falsified, but there was no review by the general meeting, because the defendant and his family controlled the companies. On the merits:

In the present case, the companies concerned made repeated substantial payments for the acquisition of watches intended for the defendant, their director, without any plan or any guarantee of repayment by the defendant, bearing the risk of his possible insolvency. … That repayment was quite simply uncertain, unforeseeable, left to the entire discretion of the defendant. … It is an illiquid and potentially unrecoverable claim that replaced liquid and available cash.

The personal guarantees the defendant invoked secured his companies’ debts to banks, not his own current-account debts to the companies, and the prospect of 5% interest did not justify advancing such sums to the director. The payments had exposed the companies to “unjustified and abnormal risks” and were contrary to their interest.

The defendant argued that the company’s interest cannot be judged in the abstract, without regard to the context, any consideration received and the company’s financial health (first branch), and that a loan to a shareholder, even for personal purposes, is not misuse without some further circumstance such as financial difficulty of the company or of the director (second branch). The Court of Cassation recalled that lack of a legal basis means insufficient findings of fact, and held that the trial judges had characterised the conflict with the company’s interest by reasons “free from insufficiency” (p. 15).

The Advocate General’s conclusions explain the background. The offence does not require that the act harmed the company; a use contrary to the company’s interest is enough. That interest is defined neither by statute nor by the case law; the courts decide whether a use is contrary to it, and authorisation or approval by the company’s bodies does not justify it. The French criminal chamber regards it as sufficient that the act caused losses “or even that it involved risks of losses to which the company’s assets did not have to be exposed”; the criteria are lack of consideration, exposure to unjustified risk and use for personal purposes (AG Kersch, pp. 47–48). Unlike French law, Luxembourg law contains no formal prohibition on managers and members of private limited companies, or directors of sociétés anonymes, obtaining an overdraft on a current account; but transparent booking does not exclude the offence. What made the use abusive was not the current-account mechanism as such but the surrounding circumstances: no review by the general meeting, repeated substantial payments for the director, no repayment plan or due date, and no security (p. 50).

Investment watches held at home: the fourth ground

For the 319 watches recorded as SOCIETE2.)’s investment, the Court of Appeal had reversed the district court. The accounting appearance that the company owned them was contradicted by the facts: the choice of watches depended on the defendant alone and followed no investment plan; he had physical possession of them at home, stored so that they could not be distinguished from the watches the other companies had paid for on his account; no deposit agreement between him and the company was alleged; and the argument that his strongroom was safer, in the absence of a safe at the company’s premises, did not convince. The complete confusion showed that “in reality and from the outset” the watches were intended for his private use, whatever the method of accounting. The company had no interest in financing luxury watches “merely to make them available later to the defendant”, and the payments exposed it to the same unjustified and abnormal risks (pp. 16–17).

The defendant argued that the question of ownership had not been debated (first branch), that a movable asset bought with a company’s funds and recorded among its assets belongs to it whatever the director’s possession, relying also on Articles 544 and 2228 to 2232 of the Civil Code (second branch), and that the conflict with the company’s interest had therefore not been established (third branch). The Court found from the procedural documents that ownership of the 319 watches had been in issue before the appeal judges, so the first branch failed on the facts; that the appeal judges, by all their reasons and not merely the point about physical possession, could hold that the defendant was, contrary to the accounting appearances, the owner of the watches without breaching the provisions cited; and that they had sufficiently characterised the conflict with the company’s interest (p. 18). The Advocate General noted that the Parquet général had itself set out the contradiction between the accounting treatment and the facts in a note communicated to the defence and to the Court of Appeal (AG Kersch, pp. 51–53).

Bad faith: the fifth ground

The Court of Appeal had held that the offence requires general intent (bad faith) and specific intent (the pursuit of a personal interest), and that “proof of the specific intent necessarily reveals the general intent”. On the specific intent, it noted that the defendant, besides his interest as a collector, admitted buying abroad through the companies to acquire some watches free of VAT and to obtain discounts. The defendant attacked the sentence on proof of intent. The Court held that the appeal judges had in any case characterised the general intent in a separate passage: as an experienced businessman with a solid accounting department at his side, the defendant could not plead ignorance of the need to keep the director’s private assets strictly apart from the company’s, and his accountant had told the police on 12 September 2012 that it had been suggested to the defendant that he repay withdrawals for purchases that were not business expenses. The disputed sentence was a superfluous reason, so the branch was inoperative (pp. 19–20).

Self-laundering, penalties and confiscation: the sixth to tenth grounds

The remaining grounds concerned the laundering conviction and the sentence. The Court refused to refer to the Cour constitutionnelle questions on Articles 506-1(3) and 506-4 of the Criminal Code, which allow the author of the predicate offence to be punished for holding its proceeds: a court need not refer a question devoid of all foundation, the party seeking a referral must explain why it may be well founded, and the provisions of the Constitution invoked (in the version applicable before 1 July 2023) were unrelated to the grievance (sixth ground, pp. 23–24). Directive (EU) 2018/1673 on combating money laundering by criminal law “establishes minimum rules” (Article 1(1)) and does not preclude punishing self-laundering by holding; Articles 49 and 50 of the Charter of Fundamental Rights did not apply because the prosecution did not involve the implementation of EU law (seventh ground, pp. 26–27). Since the Law of 17 July 2008, any offence punishable by a minimum of more than six months’ imprisonment, which includes misuse of company assets, is a predicate offence; because “laundering by holding is a continuing offence” and the defendant knowingly kept the watches after that law came into force, he could be convicted for the later period even for watches bought earlier (eighth ground, pp. 28–29).

On sentence, the Court of Appeal had found the misappropriation and the holding to be in ideal concurrence (Article 65 of the Criminal Code), each new use of company money a new criminal resolution (Article 60), and the heaviest penalty that of Article 506-1. The Court of Cassation held the sentencing sufficiently reasoned and the amount of the fine and of the confiscation, being within the legal limits, a matter for the trial judges (ninth ground, pp. 29–31). On the alleged retroactive confiscation of substituted property, it replaced the Court of Appeal’s “erroneous” reasoning with its own: property acquired with the proceeds of offences committed between 24 February 2004 and 16 August 2007 was confiscable under Article 31(1) of the Criminal Code as it then read (“things … acquired with the proceeds of the offence”), and property substituted for the object of offences from 17 August 2007 under the amended text (tenth ground, p. 32).

Outcome

The appeal was dismissed and the defendant ordered to pay the costs, those of the public prosecutor being assessed at €30.25 (p. 33). The Advocate General had proposed the same result (AG Kersch, p. 78).

Cour de cassation, 18 June 2020, no. 86/2020: a company car, fictitious staff costs and unpublished accounts

Facts and the lower courts

X was a director of a société anonyme, SOC1) S.A., and responsible for a limited partnership, SOC2) & ASSOCIES s.e.c.s. By judgments nos. 42/2010 and 43/2010 of 13 January 2010, the tribunal d’arrondissement of Diekirch declared both companies bankrupt and fixed the date of cessation of payments at 13 July 2009 (Cour de cassation, 18 June 2020, p. 8). On 30 November 2009, six weeks before the bankruptcy, X had the company’s Audi A4 registered in his own name in France, where he was then living (pp. 4, 6 and 8). In the 2006 balance sheet of SOC1) S.A. he had recorded €18,121.19 of staff costs, although no staff had been employed and declared to the social security bodies before 1 January 2007 (p. 7).

The chambre du conseil (council chamber) of the Diekirch district court, by an order of 1 March 2012, reduced the crimes of fraudulent bankruptcy and forgery in the balance sheets to délits (correctionnalisation) and sent X for trial without a judicial investigation (AG Harpes, p. 21). The summons of 3 February 2016 added charges of failing to publish the annual accounts of both companies and of carrying on the business of the partnership without a business permit (p. 22). X did not appear, and the district court, by a default judgment of 21 April 2016, sentenced him to twelve months’ imprisonment and a fine of €2,500 (AG Harpes, pp. 18 and 22). It acquitted him of the charges of misappropriating VAT collected, €13,715.15 and €28,131.10, under Articles 240 and 491 of the Criminal Code (Cour de cassation, p. 8).

The Court of Appeal, by judgment no. 256/19 of 10 July 2019, deemed to be given after hearing both parties because the summons had been served on X in person, largely confirmed the conviction. It acquitted him of the failure to publish the 2009 accounts of SOC1) S.A., because on 13 January 2010, the date of the bankruptcy judgment, the period of Article 79 of the 2002 Law, “no later than seven months after the end of the financial year”, had not yet expired; and of the failure to publish the partnership’s accounts, because its general partners were SOC1) S.A. and a natural person, so that under Article 77 of the 2002 Law it was not required to publish them (pp. 8–9). It reduced the prison sentence and ordered the car to be returned to the bankruptcy estate (AG Harpes, p. 19). The Court of Appeal applied Articles 77 and 79 as they then stood. In our current text, the publication duty in Article 79(1) covers the company forms listed in Article 77, which include a limited partnership only where all its members with unlimited liability are companies.

The grounds and the Court’s answers

The first ground, that judging X in his absence breached Article 6(1) and (3) of the European Convention on Human Rights, failed: faced with a summons validly served in person, the appeal judges assess sovereignly whether the reasons for an absence are a valid excuse (p. 6). The Advocate General showed that X had received the committal order on 17 August 2012 and the summons on 8 February 2016, had not used the remedy of opposition against the default judgment, and had had the appeal adjourned twice so that he could be assisted by a new lawyer, after his previous lawyer withdrew (AG Harpes, pp. 21–24). The second ground, lack of reasons, failed because each conviction was reasoned (pp. 7–9).

The third ground, lack of a legal basis, is the one that matters for company law. On the fraudulent bankruptcy, X argued that registering the car in his name proved no intent to divert it; he had needed a car in France while his wife was ill. The Court held that the appeal judges, finding that he had registered a car belonging to the company in his own name in the middle of the suspect period, “organising thus fictitiously … a sale for his benefit without financial consideration and with the sole aim of removing the vehicle from the company’s assets”, had given sufficient reasons (pp. 12–13). On the forgery, X argued that the “staff costs” were his own pay as a director, affiliated to social security as self-employed. The Court held the conviction under Article 169, “currently punished by Article 1500-8”, sufficiently reasoned on the basis of the documents showing fictitious staff costs (p. 13). The Advocate General explained that the district court had treated the entry as forgery in a commercial writing, “the balance sheet of a company being a writing producing a legal effect, informing third parties of the trader’s financial position”, and that the appeal judges had implicitly but necessarily found that X acted knowingly (AG Harpes, pp. 30–31). The fourth ground, lack of fraudulent intent for the bankruptcy offence, failed for the same reasons (pp. 14–15).

The fifth ground argued that, by holding that X had “not shown” that he held a business permit for the partnership, the Court of Appeal had reversed the burden of proof. The Court held that, in view of an inquiry at the Ministry of the Middle Classes showing that the permit application had not been granted, there was no reversal (p. 16). The conviction was under Articles 1 and 22 of the Law of 2 September 2011; in our current text, Article 1 requires a business permit for an independent commercial activity and Article 22 sets the qualification for the profession of accountant.

The appeal was dismissed, with costs assessed at €4.25 (p. 16).

Cour de cassation, 4 June 2026, no. 112/2026: the minority action before the investigating judge

Facts and the decisions below

SOCIETE1.) SPF, a partnership limited by shares, held 50% of the société anonyme SOCIETE2.). On 10 April 2017 it filed a complaint with the investigating judge in Luxembourg against three directors of SOCIETE2.) for misuse of company assets and for forgery and use of forgeries in the accounts and balance sheets (AG Hilgert, p. 9). The complaint stated that SOCIETE1.) acted “as shareholder” and filed it “by application of the new Article 63bis of the 1915 Law on commercial companies on behalf of SOCIETE2.) S.A. (action sociale ut singuli)”; it put SOCIETE2.)’s material loss from the alleged misuse at €1,476,240.25 and its non-material loss at €15,000, and claimed its own material loss “p.m.” (pour mémoire, not quantified) (AG Hilgert, p. 11; Cour de cassation, 4 June 2026, p. 5). SOCIETE2.) had been placed under a court-appointed provisional administrator.

By order of 23 May 2025, the investigating judge declared the complaint inadmissible. The chambre du conseil of the Cour d’appel, by judgment no. 500/25 of 11 November 2025, confirmed. It recalled the Court’s case law that a complaint requires the possibility of a personal and direct harm to the civil party (citing Cour de cassation, 15 October 2015, no. 45/2015; 9 October 2023, no. 107/2023; 7 December 2023, no. 136/2023), and held that any harm to SOCIETE1.) was not “ipso facto” personal and direct, “for the simple reason that it is a legal entity different from SOCIETE2.) and that the interests of SOCIETE2.) are represented by the provisional administrator”; French case law was not transposable. As to SOCIETE1.)’s own harm, a material loss stated “p.m.” was a mere assertion and “would amount to admitting a purely hypothetical harm”, and it had not said what its non-material harm consisted of (pp. 2 and 5).

Admissibility of the appeal

The Advocate General noted that the time limit for an appeal in cassation against a judgment of the chambre du conseil not delivered on a pre-announced date runs only from notification; the judgment had been sent to a former registered office and returned as unknown, so time had not started (AG Hilgert, p. 8). Under the Court’s settled case law a civil party may appeal against a refusal to investigate or a decision declaring its complaint inadmissible (p. 9).

The first ground: acting for the company

The first ground, in four branches, argued that a minority or equal shareholder may bring the liability action on the company’s behalf before the civil or the criminal court, that the conditions of Article 56 must then be assessed in the company’s person because the damages go to the company (first branch), that the existence of the company’s statutory or court-appointed representatives does not exclude the minority action (second branch), and, in the alternative, that if the minority action is subsidiary to an action by a provisional administrator, it is excluded only if the administrator has actually sued (third and fourth branches) (pp. 2–3).

The Court took the first two branches together and quashed. After quoting Article 56 and Article 444-2, it held:

The liability of directors, members of the management board and members of the supervisory board being recognised, under Articles 441-9, 442-10 and 442-16 of the LSC, for breaches of the provisions of that law, including the criminal provisions of Articles 1500-1 et seq., the minority action provided for by Article 444-2 covers both the civil action and the criminal action.

A shareholder or holder of beneficiary units who meets the conditions of Article 444-2 may therefore file a complaint as civil party against the directors and board members “acting on behalf of the commercial company within which the latter exercise their functions and in which he holds a minority interest, the possibility of harm being assessed only in the person of that company and without regard to the ordinary rules on the representation of commercial companies in legal proceedings” (p. 4). The Court then settled the question of the equal shareholder:

Article 444-2 of the LSC, in so far as it is intended to give a means of action to shareholders and holders of beneficiary units who are unable to have the general meeting adopt a decision to hold the directors, the members of the management board or the members of the supervisory board liable, applies both to the shareholder or holder of beneficiary units holding an interest below 50 per cent, provided that it reaches 10 per cent, and to one holding an interest equal to 50 per cent.

By requiring SOCIETE1.) to show a personal harm distinct from SOCIETE2.)’s, and by relying on the presence of the provisional administrator, the chambre du conseil had breached Article 56 read with Article 444-2 (p. 5). The Court did not rule on the third and fourth branches.

The second ground: acting in its own name

The second ground argued that at the stage of the investigation Article 56 requires only the possibility of a harm, so that a civil party need neither quantify it (first branch) nor show that it is personal and direct (second branch). The Court held that the chambre du conseil, by its reasons on the “p.m.” material loss and the unspecified non-material loss, had applied Article 56 correctly (p. 6). The Advocate General had read the judgment as criticising not the lack of a figure but “the absence of any precision as to the very nature” of the harm, and recalled the Court’s case law that a complainant need not prove the harm but must prove its possibility, quoting the Procureur général d’État’s conclusions before the Court’s judgment of 15 October 2015: “it is not enough to invoke a harm in the abstract” (AG Hilgert, pp. 20–22). In a case concerning misuse of company assets, the Court had held on 9 October 2023, no. 107/2023, that complainants who showed no personal and direct harm distinct from that of the companies harmed by the alleged misuse were inadmissible (AG Hilgert, p. 21).

Outcome

The Court quashed the judgment “in so far as it held that the admissibility of the complaint with civil-party petition filed by a shareholder on the basis of Article 444-2 … requires proof of a personal and direct harm suffered by the latter”, referred the case to the chambre du conseil of the Cour d’appel, differently composed, and left the costs to the State (p. 7).

The Advocate General’s analysis

Advocate General Hilgert’s conclusions of 20 March 2026 explain the reasoning the Court adopted. She distinguished two situations. A shareholder who claims an individual loss must show a personal loss distinct from the company’s, because a société anonyme has its own legal personality and alone may sue for harm suffered by the company, that is, by all the shareholders; French and Belgian law likewise treat the fall in value of shares caused by misuse of company assets as the company’s harm, not each shareholder’s (pp. 12–13). Luxembourg courts had held that the French derivative action ut singuli was not part of Luxembourg law; Article 444-2 changed that (p. 13). According to the doctrine she cited, the legislator drew largely on Articles 562 to 567 of the former Belgian Companies Code (now Articles 7:157 and following of the Code of Companies and Associations), so as to let the minority step in for a defaulting majority. The minority action is an actio mandati, brought by the minority shareholders in their own name but on behalf of and in the interest of the company; they need not show a personal loss, and any damages go to the company (pp. 14–15). The Cour d’appel had held in judgment CAL-2019-00826 that Article 444-2 creates no new head of directors’ liability and is a procedural law conferring the right to act on behalf of the company on new actors (p. 14). In France, a shareholder bringing the company’s action may join criminal proceedings as civil party (Cour de cassation française, 29 January 2020, no. 19-80.924); research on Belgian law was inconclusive (pp. 16–17). Unless the civil and criminal sides of the same action were to be separated, she concluded that shareholders entitled to bring the minority action could also file a complaint on behalf of the company (p. 17).

On the third and fourth branches she considered that the chambre du conseil had not treated the minority action as subsidiary; it had mentioned the provisional administrator only to stress that SOCIETE1.)’s harm was not personal. She added that the company action belongs to the company itself and that it is for the general meeting to decide beforehand to sue the directors at fault (AG Hilgert, pp. 18–19).

Cour de cassation, 8 October 2026, no. 166/2026: worthless shares are the company’s loss

Facts and the decisions below

On 15 January 2025, SOCIETE1.) S.A., SPF, acting as majority shareholder of the société anonyme SOCIETE2.) S.A., filed a complaint with the investigating judge in Luxembourg against PERSONNE1.) for misuse of company assets and misuse of powers “within the meaning of Article 1500-11” in the management of SOCIETE2.) (AG Leal Alves, p. 8). The investigating judge, by order of 3 December 2025, declared the complaint inadmissible for want of a harm directly related to the offences. The chambre du conseil of the Cour d’appel confirmed on 17 February 2026, judgment no. 93/26 (Cour de cassation, 8 October 2026, pp. 1–2). It reasoned:

According to the case law, it is a principle that the devaluation of the share capital resulting from the offence of misuse of company assets or of misuse of powers committed by a company officer constitutes not a loss proper to each shareholder or member, but a harm suffered by the company itself … In the present case, on reading the complaint, the chambre du conseil of the Cour d’appel notes that the civil party alleges a harm in that it “will in reality be left with shares of no value”.

It cited two judgments of the French criminal chamber of 13 December 2000 and added that the same principle is applied consistently by the Luxembourg courts (p. 4).

The grounds and the Court’s answers

SOCIETE1.) argued that it had raised specific points before the chambre du conseil: that its harm was not hypothetical, given the effects already produced by decisions taken in SOCIETE2.)’s name in proceedings pending in Brazil, and that it was personal and direct, given its majority stake, the nature of its investment and the damage to the company’s main asset (first ground, failure to answer submissions; second ground, lack of reasons, both under Article 109 of the Constitution and Article 195 of the Code of Criminal Procedure). The Court held that the appeal judges “were not required to follow the parties in the detail of their argument” and had given reasons on the points at issue (pp. 3–4).

The third ground argued that the chambre du conseil had contradicted itself by requiring both a harm that is “born and present” and only “the possibility” of a personal and direct harm. The Court held the ground inadmissible: a contradiction of reasons can be relied on only between reasons of fact, and both statements were reasons of law (pp. 5–6). The Advocate General had added that the two statements were consistent: the first describes the harm required, the second the fact that at the admissibility stage the court checks only whether the facts denounced may have caused such harm (AG Leal Alves, p. 13).

The fourth ground argued that Article 1500-11, while in principle causing harm to the company, does not exclude in particular circumstances a personal and direct harm to the shareholder, for example where the damage to company funds merges with damage to its investment or affects a right of its own. The Court held that Article 1500-11 was “foreign to the grievance” and the ground inadmissible (pp. 6–7). The Advocate General would have rejected it on the merits: the chambre du conseil had not excluded in law that a shareholder may, in particular circumstances, suffer a personal harm distinct from the company’s; it had found that in this case the harm alleged was the loss of value of the shares, which merged with the company’s alleged harm, an assessment within its sovereign power (AG Leal Alves, pp. 13–14).

The appeal was dismissed, with costs assessed at €2.25 (p. 7). The Advocate General had considered the appeal admissible under Article 416 of the Code of Criminal Procedure, because the judgment ruled definitively on the principle of the civil action (AG Leal Alves, p. 9).

How the judgments fit together

What turns a use of company money into a crime

The 2023 judgment shows that the Cour de cassation leaves the classification of a given use as contrary to the company’s interest largely to the trial judges, and controls only that their findings are sufficient. The findings it accepted are instructive. Neither transparency in the books nor later repayment, interest or the company’s continued solvency prevented a conviction, because the offence is complete with each payment and the risk is judged at that moment. A debit current account is lawful as such; what made it abusive here was a pattern of repeated, large payments for the director’s private purposes with no repayment plan, no due date and no security. And recording an asset on the company’s balance sheet did not make it the company’s where everything else (choice, possession, storage, use) pointed to the director. The 2020 judgment, on the bankruptcy and forgery offences, is of the same kind: findings that a car was moved into the director’s name “without financial consideration” in the suspect period, and that staff costs in a balance sheet were fictitious, were enough.

Limitation in owner-managed companies

The rule the Court of Appeal applied in 2022 is a significant one for owner-managed and family companies. Without concealment, time would run from the presentation of the accounts to the members. But where the director and his family or his controlled entities are the members, no one can be expected to report, the general meeting’s review is excluded, and the Court of Cassation accepted that the offence could be treated as clandestine, with time running only from when the prosecutor could act. In that case it was the report by the tax authority. The Court did not decide whether the tax authority’s own earlier knowledge would have started the period, because the result was the same either way. The same judgment adds that keeping assets bought with company money is itself laundering by holding, a continuing offence.

Who may complain: the company, the minority and the shareholder in its own name

The two 2026 judgments, no. 112/2026 and no. 166/2026, are complementary. A shareholder who complains in its own name must show the possibility of a personal and direct harm, and the loss in value of its shares does not qualify, because it reflects the company’s loss (October 2026); nor does a bare “p.m.” entry or an unspecified non-material loss (June 2026). A shareholder who holds at least 10%, or exactly 50%, may instead act for the company under Article 444-2, before the investigating judge as before the civil courts, and then the possible harm is the company’s (June 2026). The October 2026 complainant held a majority; the judgment does not mention Article 444-2, and the reasoning of June 2026 rests on the minority’s inability to obtain a general meeting decision to sue, which a majority shareholder does not lack.

Open questions

Several points remain open in our sources. The June 2026 judgment did not rule on whether the minority action is subsidiary to an action by a provisional administrator, nor did it address the reference in Article 444-2 to holdings at “the general meeting that decided on the discharge”. The Advocate General declined to take a position on the equal shareholder’s standing beyond the grounds before the Court, noting that the Cour d’appel had recognised it in a civil case (CAL-2019-00826, 27 October 2021), that the appeal against that judgment had been declared premature (Cour de cassation, 9 February 2023, no. 18/2023) and that the merits were still pending before the seventh chamber (AG Hilgert, p. 18); the Court has since answered the question in the criminal context. The text of Article 444-2 refers to directors and members of the management and supervisory boards; all the cases concern sociétés anonymes, and none addresses other company forms. Finally, the October 2026 Advocate General observed that the chambre du conseil had not excluded in law that a shareholder may, in particular circumstances, suffer a distinct personal harm, but neither judgment says what those circumstances are.

What it means in practice

• Advances to directors and shareholders. Luxembourg law does not prohibit a debit current account, but the 2023 case shows what a criminal court looks at: whether there is a written loan with a due date, security that actually covers the director’s debt to the company (not his guarantees of the company’s bank debts), a commercial reason for the company to lend, and the size and frequency of the payments. Interest charged after the event, repayment and assignment of the receivable did not help.
• Assets held for the company. Where a company buys valuables as an investment, the facts relied on in 2023 suggest keeping evidence of an investment policy, storing the assets separately and identifiably, and documenting any custody by a director in a deposit agreement.
• Family and owner-managed groups. Do not assume that limitation runs from the approval of the accounts. Where the members are the director and his family, the courts may treat the period as starting only when the prosecutor learns of the facts.
• Balance sheets. An entry that does not correspond to a real expense (in 2020, staff costs for a period with no declared staff) is prosecuted as forgery under what is now Article 1500-8, an offence carrying réclusion of five to ten years in our current text.
• Bankruptcy. Moving a company asset into a director’s name during the suspect period without consideration was treated as fraudulent bankruptcy, and the car was ordered returned to the estate.
• Minority shareholders. A shareholder with at least 10% of the votes, or exactly 50%, may file a criminal complaint against the directors on behalf of the company. The June 2026 complaint stated expressly that it was filed under the minority action provision and for the company, and quantified the company’s loss; a complaint should make the capacity in which the shareholder acts clear and keep any claim in its own name separate and specific.
• Claims in one’s own name. A claim that one’s shares are worthless is the company’s claim. A personal claim needs a harm distinct from the company’s, identified concretely; “p.m.” is not enough.
• Timing. In the June 2026 case the complaint was filed in April 2017 and the investigating judge ruled on its admissibility in May 2025. Investigations of this kind can take years before the merits are reached.

Status

The 2023 and 2020 judgments dismissed the appeals, so the convictions stand. In the June 2026 case the Court referred the question of the admissibility of SOCIETE1.)’s complaint on behalf of SOCIETE2.) back to the chambre du conseil of the Cour d’appel, differently composed; no later decision is in our sources. The October 2026 judgment ended the majority shareholder’s complaint in its own name. Since the 2017 renumbering the offences discussed are in Title XV of the 1915 Law: misuse of company assets in Article 1500-11 (former Article 171-1) and forgery in the balance sheets in Article 1500-8 (former Article 169); the minority action, introduced as Article 63bis in 2016, is Article 444-2. The duty to give reasons relied on in these appeals was Article 89 of the Constitution in its version before 1 July 2023 (Cour de cassation, 21 December 2023, pp. 24 and 31) and is cited as Article 109 in the October 2026 appeal.

Provisions discussed

• Company Law: Art. 1500-11, Art. 1500-8, Art. 444-2, Art. 441-9, Art. 442-10, Art. 442-16
• RCS Law: Art. 79
• Business Permit Law: Art. 1

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How to cite

Case law review by BCA EU, for information. Quotations from the judgments are our translations; only the original texts published by the courts are authoritative. Judgments checked on the official sources on 30 October 2026. This page is not legal or tax advice.