Application for a special audit at the AGM: No dishonesty or gross breach of duty where the legal situation is unclear, and requirements for substantiating suspicion of a breach of duty

In practice, the special audit is particularly important for minority shareholders because, under certain conditions, they can obtain a court appointment of a special auditor even against the will of the majority.

The target of applications for special audits is often to create a basis for asserting damages claims against the members of the stock corporation’s corporate bodies.

In a recently published preliminary order (KG, Hinweisbeschluss dated January 16, 2026 – 14 W 31/25), the Berlin Court of Appeal set out practical requirements and conditions for the court appointment of a special auditor.

Applications for special audits to prepare the assertion of claims against the corporate bodies

Applications for special audits serve to review events relating to the formation or management of the company. As a rule, the general meeting decides on the application to appoint a special auditor. If the general meeting rejects an application to appoint a special auditor, an application can be filed with the court for the court appointment of a special auditor.

The application must be filed by shareholders whose shares, at the time the application is filed, together amount to one hundredth of the share capital or a pro rata amount of €100,000. The court must then appoint a special auditor if facts exist which— to the court’s satisfaction—justify the suspicion that, in the transaction in question, (i) dishonest conduct or (ii) gross violations of the law or the articles of association have occurred.

The key question in assessing an application for the court appointment of a special auditor is therefore often whether facts exist that justify such a suspicion. It is not sufficient for an applicant merely to express a suspicion. Rather, at least a certain likelihood that the suspicion-forming facts exist is required. The facts must be asserted by the applicant, but they need not be proven or substantiated to the standard of prima facie evidence.

It should be sufficient that the court is convinced there are sufficient indications of suspicion or considers further clarification of the facts necessary under the principle of ex officio investigation. By contrast, the mere possibility of dishonest conduct or a gross violation of the law or the articles of association is not enough.

Since a special audit serves to establish facts that provide the basis for possible legal consequences—specifically, damages claims by the stock corporation against the management board and supervisory board—ordering a special audit is ruled out if all relevant facts are undisputed. In that case, only the legal assessment of the undisputed facts would still be required as to whether they give rise to claims. However, that is not the subject of a special audit.

In practice, applicants often make assumptions in their application to appoint a special auditor, or infer from facts unknown to them that those facts must not exist—for example, that the management board did not conduct a review or plausibility check because (to them) such a review or plausibility check is not known. In other words, there is often an attempt to fill a vacuum of factual knowledge by asserting or assuming the opposite as fact.

In addition, applicants use applications for special audits to look for starting points to assert claims by the stock corporation against the acting corporate bodies. In doing so, the question often arises whether, for example, the management board acted within the legally permissible scope when making a decision.

Especially where the legal situation is unclear regarding the interpretation and application of provisions of the German Stock Corporation Act, the question then arises whether a particular interpretation of the applicable legal norm by the management board—or correspondingly, in the context of the supervisory board’s duty of oversight—constitutes a gross violation of the law.

The sword of Damocles of a special audit can lead to the acting corporate bodies being unduly constrained in decision-making, because, faced with the threat of a special audit, they choose the interpretation that is safest for their liability.

Preliminary order of the Berlin Court of Appeal

In the case assessed by the Berlin Court of Appeal, an (activist) investor filed an application with the court under Section 142(2) AktG for the appointment of a special auditor after failing with an application to appoint a special auditor at the general meeting. The background to the application was the acquisition of shares in the respondent by the respondent’s majority shareholder and a loan granted by the respondent to the majority shareholder two months after the share acquisition.

Among other things, the applicant sought clarification as to whether the loan primarily served to finance the takeover of the respondent by the majority shareholder and thus constituted a breach by the management board of the prohibition on financing the acquisition of shares under Section 71 AktG. The applicant also took the view that granting the loan constituted an impermissible (hidden) repayment of capital contributions, so that a breach of Section 57 AktG could be considered. It was also to be examined whether funds from the sale of a portfolio of the respondent could have been used better elsewhere (instead of by granting a loan to the majority shareholder).

In its preliminary order, the Berlin Court of Appeal first states, with reference to the legislative reasoning, that an application for the court appointment of a special auditor requires facts that justify the suspicion that dishonest conduct or gross violations of the law or the articles of association have occurred. The court explicitly emphasizes that, according to the legislative reasoning, “high requirements must be placed on the court’s conviction that the facts exist” (BT Drs. 15/5902, p. 18).

The Berlin Court of Appeal then addresses the requirements for an applicant’s submissions regarding the facts that make a breach of duty appear not merely possible but probable. The Berlin Court of Appeal states as follows (KG Berlin, order of January 16, 2026 – 14 W 31/25 –, juris, para. 11):

“In this respect, positive facts are generally required; it is not sufficient if an applicant merely points to circumstances that are unclear to them or not comprehensible. The purpose of the application under Section 142(1) sentence 1 AktG is not that a respondent must defend itself in court against ultimately arbitrary purely negative facts presented by the applicant on the basis of conjecture, thereby potentially creating the prerequisites for an application in the first place. ”

The Berlin Court of Appeal further addresses the question of whether, in an application for the court appointment of a special auditor, circumstances can establish a sufficient likelihood of dishonest conduct or a breach of the law or the articles of association if the assessment of those circumstances concerns unresolved legal issues. This concerns the question of whether the corporate bodies of the stock corporation acted within the permissible legal framework where the interpretation of the applicable legal rules, based on the asserted facts, involves unresolved legal issues. The Berlin Court of Appeal states in this regard:

“To the extent legal questions arise, (reasonable) doubts about the correct interpretation are not sufficient to assume dishonest conduct or gross violations of the law or the articles of association. This also applies with regard to the breaches of duty mentioned in Section 93(3) AktG, which are generally intended to indicate gross violations (Koch, 19th ed. 2025, AktG Section 142 para. 20). ”

The Berlin Court of Appeal justifies its view with the need for a margin of entrepreneurial discretion and states:

“Otherwise, the management board’s entrepreneurial discretionary decision would be constrained in advance, because it would generally have to expect applications for the appointment of a special auditor and, in case of doubt, would have to choose the interpretation that excludes its liability. That is not the purpose of appointing a special auditor, which is fundamentally aimed at fact-finding, and a gross violation of the law/articles of association or dishonest conduct cannot be substantiated in this way. ”

The Berlin Court of Appeal then addresses the breaches of duty alleged by the applicant. In the court’s view, dishonest conduct or a gross violation of the law or the articles of association through granting the loan to the majority shareholder is ruled out because it has not yet been clarified by the highest courts whether a (follow-on) loan granted after the (already bridge-financed) share acquisition can still be made for the purpose of the acquisition within the meaning of Section 71a AktG.

The mere temporal proximity between the share acquisition and the loan granted to the majority shareholder (two months later) does not constitute a sufficient indication of a prior “linking agreement” for follow-on financing covered by Section 71a(1) sentences 1 and 2 AktG.

Accordingly, there is also no sufficient indication of dishonest conduct or gross violations of the law that are not merely possible but probable. In the Berlin Court of Appeal’s view, the mere absence of an external legal review and the applicant’s denial of an internal—possibly missing—legal review of the loan grant with regard to the requirements and limits under Section 71a(1) AktG are likewise not sufficient as indications (KG Berlin, order of January 16, 2026 – 14 W 31/25 –, juris, para. 13 f.).

The court likewise denies a breach of the prohibition on repayment of capital contributions (Section 57 AktG). The circumstances and (alleged) omissions presented by the applicant were merely assumptions. However, these do not allow sufficiently reliable conclusions that the respondent did not carry out the necessary reviews and considerations.

In the Berlin Court of Appeal’s view, the reviews and resolutions carried out by the respondent’s corporate bodies also do not reveal any positive indications that improper considerations were made that could be regarded as dishonest conduct or gross violations of the law (KG Berlin, order of January 16, 2026 – 14 W 31/25 –, juris, para. 15).

The—already known—dual role of an employee of the respondent also in the finance area at the majority shareholder likewise provides no indications in the required sense. Finally, it is not apparent that using the proceeds from the sale of a portfolio of the respondent to grant the loan, as opposed to another use of funds, constitutes an indefensible entrepreneurial decision.

With regard to an alleged breach of the supervisory board’s duty of oversight of the respondent, for example due to a lack of information basis, failure to address a conflict of interest involving the employee’s dual role, and insufficient inquiry into the review and/or compatibility with Section 71a AktG, the Berlin Court of Appeal refers to its preceding statements.

The unresolved legal situation and the lack of positively asserted facts therefore also meant, in this respect, that in the court’s view there were no indications that would make dishonest conduct or a gross violation of the law or the articles of association not merely possible but probable.

Nor does anything different follow from the fact that some supervisory board members were appointed only as of January 1 of the year and that the supervisory board resolved on the granting of the loan at its meeting on January 2. It is not apparent why these supervisory board members should not have had the information and knowledge necessary for their decision at the supervisory board meeting, or why it should not have been conveyed to them there.

Implications of the decision for practice

Special audits impose significant financial burdens on the affected company, as the costs of the special audit must be borne by it. In addition, a (court-)ordered special audit is often associated with a considerable loss of reputation. Accordingly, there is a latent risk of instrumentalizing the right to apply for a special audit to build pressure or enforce legal positions.

With its clarifications in the preliminary order, the Berlin Court of Appeal raises the hurdles for a court-ordered special audit. At the same time, the preliminary order strengthens the entrepreneurial activity of management bodies, which is generally associated with a certain degree of risk, including when assessing the legal framework. This applies in particular where no clear line and no decision by the highest courts has yet emerged on legal issues.

In addition, applying the Berlin Court of Appeal’s clarifications on the requirement for positive facts curbs fishing expeditions through the filing of applications for special audits. According to the Berlin Court of Appeal, dragnet-style suspicions and conjecture cannot lead to a successful application, because otherwise the stock corporation would have to defend itself in court against ultimately arbitrary purely negative facts presented by applicants on the basis of conjecture, thereby potentially creating the prerequisites for an application in the first place.

Taken further, this appears consistent, since it cannot be the task of an appointed special auditor to first have to establish the facts that would be a prerequisite for their court appointment.

At the same time, it should not be overlooked that the Berlin Court of Appeal’s statements do not themselves constitute a decision by the highest courts and therefore provide only a supporting anchor. Likewise, the possible further course of the proceedings is currently not yet known.

Managing directors will still have to make their decisions within the framework of the business judgment rule and document the decision-making process. Even after the Berlin Court of Appeal’s order, management boards and supervisory boards are well advised to support the decision-making process by involving external expertise with corresponding opinions and to document and plausibilize these opinions.

In particular, the acting corporate bodies should clarify in advance whether a margin of discretion may apply. In this respect, the principle “whoever writes, stays” is not repealed or overridden by the Berlin Court of Appeal, and corporate bodies should continue to adhere to the principles of the ISION case law.

From the newsletter
“Corporate Law, Deals & Capital Markets” Subscribe to the newsletter
here