Cash pool sweeps just before bankruptcy: director and shareholder jointly and severally liable
On 30 October 2026, the Arnhem-Leeuwarden Court of Appeal published a judgment of 6 October 2026 on cash pooling in the run-up to a bankruptcy. The court held that automatic 'sweeps' to the shareholder when bankruptcy is in sight can make both the director and the shareholder liable. The district court had still rejected the bankruptcy trustee's claims.
What happened?
Two operating companies and their majority shareholder had a zero balancing arrangement with the bank: the positive balances of the operating companies were transferred daily to the shareholder's main account and set off in a current account. In early May 2020, the bankruptcy of both operating companies was being prepared. The director deliberately informed the bank only on 15 May and deliberately chose the bankruptcy date so that the shareholder no longer had to top up shortfalls. The operating companies were declared bankrupt on 19 May 2020.
The court's decision
The court considered that each 'sweep' and its set-off amounted to a payment to an affiliated company. From 8 May 2020, the director knew, or should have known, that the bankruptcies were to be expected. From that moment, he was in principle no longer free to favour the shareholder over other creditors. The fact that the sweeps were automatic does not change this. The director is personally seriously to blame; the shareholder also acted unlawfully. Both must jointly and severally pay the trustee just over EUR 243,000, plus statutory interest from 19 May 2020.
What does this mean for groups with a cash pool?
A cash pool is a common and efficient tool for group financing. But once the bankruptcy of a group company comes into view, every automatic transfer changes character: it becomes a payment to an affiliated party, for which the director may be personally responsible.
Practical tips
Set out in the cash pool arrangements how and when sweeps are stopped if a group company runs into financial difficulty.
Inform the bank in good time and, when bankruptcy threatens, document which payments are still made and why.
As director of a group company in distress, obtain independent advice on payments to affiliated parties.
Read more about how we support group financing and director liability matters on our specializations page. Does your group work with a cash pool? Contact us.
This blog provides general information and is not legal advice. For advice on a specific situation, please contact us.
