January 2026

Decision of the Single-Member Court of First Instance of Nafplio on an Individual Claim for Damages by a General Partner due to the Dissolution of an L.P. for Just Cause

The Decision No. 140/2025 of the Single‑Member Court of First Instance of Nafplio was recently issued. In this decision, the Court held that the general partner — our client — has an individual right to compensation for the damage he suffered as a result of the culpable dissolution of the limited partnership (LP) in which he participated. Specifically, the Court found that the managers of the aforementioned legal entity, both the statutory managers and, in particular, the de facto manager (who in practice exercised the entirety of the executive functions), led the LP to a cessation of activity and, ultimately, to dissolution — with conduct contrary to Article 919 of the Greek Civil Code, i.e., with fraudulent and unethical actions.

The Court accepted, in particular, that the de facto manager and the statutory manager — his wife — through a company under their control, exploited a business opportunity of the LP in question and, without informing it, purchased the leased property that housed its business operations. By doing so, they breached their duty of loyalty both to the LP itself and to our client. This breach culminated when the new owning company refused to continue the lease relationship and insisted on the immediate return of the leased premises without negotiation. The return of the property was ultimately completed in favor of the company controlled by the managers, and the LP’s business premises were closed, without a unanimous decision of the LP and, consequently, without our client’s consent.

It is also noteworthy that the LP was particularly profitable and that the aforesaid property, due to its vital location for the business, was essentially responsible for the company’s increased turnover.

The relevant findings of the judgment read verbatim as follows: “Therefore, prior to its vacating the leased premises, the company demonstrated a complete and profitable economic activity that was fully linked to the use of that specific property. The departure from it would demonstrably cause irreparable harm to it {…}. In the opinion of the present Court, there was an obvious and significant conflict of interest since Mr. … indeed, in fact, as manager of both the lessor company and the lessee company, made decisions that directly affected both entities and, in this case, to the detriment of the second LP. Such conflict directly contravenes the principles of good faith and fair dealing, making rational and objective management of the lease impossible {…}. In any event, as stated in the principal reasoning of this decision, the plaintiff in application (a) is not precluded from seeking by action, even at the stage of liquidation, compensation from those who, through their fault, caused the dissolution, for any consequential damage suffered by him due to the premature dissolution of the company and the loss of his share of the corresponding profits.”

Accordingly, despite the general principle of indirect recovery of partners’ losses through satisfaction of the legal entity’s damage, in certain cases of manifest harm to the partners’ interests caused by bad‑faith conduct, this rule is set aside, and the partner is entitled, in his own name and individually, to seek redress.