The D&O settlement litigation in the VW Dieselgate scandal is about to enter its next phase. Following the ruling of the Federal Court of Justice (BGH) in September 2025, which declared the 2021 D&O coverage settlement void, the Investors’ Protection Association SdK has now also contested the revised annual general meeting resolutions of June 2026. For D&O insurers, major corporate groups, and their governing bodies, this case carries significant practical implications - illustrating just how difficult it can be to finalise settlements within complex corporate structures.
The dispute has a long history. In July 2021, the Volkswagen annual general meeting approved a settlement package providing for payments totalling around EUR 288 million to VW. The biggest share, with EUR 270 million being contributed by the D&O insurers, was supplemented by personal contributions from former members of the governing bodies, including former CEO Martin Winterkorn (EUR 11.2 million) and the former Audi CEO Rupert Stadler (EUR 4.1 million).
However, in September 2025, the Federal Court of Justice (BGH) declared this resolution void (case ref. II ZR 154/23). The reason provided was that essential information had been withheld from shareholders in the meeting convening notice – specifically, that the settlement simultaneously entailed a comprehensive waiver of damages claims against around 170 further members of the governing bodies. These initial proceedings were already triggered by an SdK lawsuit.
Consequently, Volkswagen had to seek a new shareholder approval at the ordinary general meeting of 18 June 2026. The vote covered the resolutions regarding agenda item 7A (coverage settlement with the D&O insurers) and agenda item 7B (confirmatory resolution on the liability settlement with Winterkorn). The revised coverage settlement totalled EUR 277.715 million – a new addition to the consortium was the US insurer Berkshire with EUR 7.7 million, having initially declined participation. Other participating insurers include Zurich, AIG, AGCS, and six further companies.
The SdK has now also contested these resolutions before the Hanover Regional Court.
The latest action for rescission is based primarily on the prohibition of preferential benefits under Sec. 243 (2) Sent. 1 of the German Stock Corporation Act (AktG). In the SdK's view, the structure of the settlements results in impermissible advantages for major shareholders as well as benefits for third parties, namely current and former members of the governing bodies.
The underlying argument is structurally interesting: when major shareholders who also sit on the supervisory board agree to a comparatively low D&O deal, they are effectively protecting themselves and related members of the governing bodies from further recourse claims – at the expense of the corporate group and minority shareholders.
Markus Kienle, lawyer and board member of the SdK, states: "In essence, this involves undisclosed preferential benefits for the major shareholders, who are, however, thoroughly financially solvent."
Another issue is Winterkorn's personal contribution: EUR 11.2 million out of a gross total income of reportedly around EUR 120 million during his tenure. The SdK demands that VW must at least determine and disclose Winterkorn's assets, enabling shareholders to comprehend the recommendation for resolution issued by the management board and supervisory board.
For the D&O insurers involved in the VW consortium, the situation is unfortunate. D&O insurers conclude settlements to achieve finality on claims and release reserves. The BGH ruling of September 2025 had already forced many insurers to reopen their claim files.
The fact that the new versions of the resolutions from 2026 are now also being legally contested reveals a structural problem: Should the SdK once again succeed with its objections under German stock corporation law, D&O settlements in major corporate groups will come under pressure in general. After all, the contestability of resolutions passed at annual general meetings is not a problem specific to VW – it can become relevant wherever major shareholders, supervisory board members and D&O insurers find themselves in complex conflicts of interest.
Legal certainty through a settlement – previously a standard tool in D&O claims management – will thus be more difficult to achieve in similar circumstances.
These proceedings have implications beyond the individual case. In our view, there are three questions in particular that remain unresolved, the judicial answers to which are likely to significantly influence D&O practice:
1. What requirements does German stock corporation law impose on the concept of transparency in the context of general meeting resolutions on D&O settlements? In 2025, the BGH clarified that essential information – particularly the waiver of claims against a large number of members of the governing bodies – must be disclosed. The exact scope of this duty remains to be specified.
2. Under what circumstances is an impermissible preferential benefit given within the meaning of Sec. 243 (2) AktG? The SdK's thesis that major shareholders on the supervisory board face a structural conflict of interest when voting on D&O settlements is legally by no means trivial – and has not yet been decided by the highest court.
3. How can D&O settlements be structured in a legally sound manner within complex corporate group structures? For insurers, management boards, and supervisory boards, it remains essential to diligently prepare settlement processes – through clear documentation, full disclosure of information to shareholders, and early legal counsel.
According to its own statements, VW remains confident and is approaching the proceedings with composure. It will be up to the Hanover Regional Court to determine whether this composure is justified.
