Legal Consequences of Exceeding the Limits of the Mandate Given to the Director with the Solidarity Clause Inserted in the Approved Mortgage Agreement
Legal Consequences of Exceeding the Limits of the Mandate Given to the Director with the Solidarity Clause Inserted in the Approved Mortgage Agreement

Summary/Abstract: This paper aims to address the issue of concluding a mortgage agreement incorporating a solidarity clause in lack of a Shareholders Meeting Resolution of approving such solidarity clause. This hypothesis raises several questions. Which prevails, the statutory director’s right or the limited special mandate given by the General Meeting of the Shareholders? Is the director allowed to sign the mortgage agreement exceeding the limits of the mandate based on the general mandate given by the company prevailing on his capacity as director? Is the company engaged in what concerns the solidarity clause inserted in the mortgage agreement concluded with the bank if the latter knew director powers were exceeded? Is it conceivable to remedy the defect by subsequently issuing a resolution of the general meeting of shareholders approving the solidarity clause after the signing of the mortgage agreement? Would that cover the initial deficiency? Given the fact that the solidarity clause was not approved by the Shareholders, would such a clause be deemed to be valid? Would a decision issues by the syndic judge on the contestation to the table of receivable of the bankrupt company have res judicata as oppsosed to a subsequent claim for ascertaining nullity of the solidarity clause inserted in the mortgage agreement? Would a third party to the mortgage agreement have legal standing capacity and interest to claim ascertaining the nullity of the solidarity clause? I will try to address all of this in this article.

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