The implications of statutory joint and several liability
According to the Act on KommuneKredit, ’the members shall be directly, jointly and severally liable for all obligations assumed by the institution’. This liability structure has existed since 1899 and ensures the protection of all KommuneKredit's creditors. Notably, it has never been invoked.
If KommuneKredit ever fails to meet its obligations, the creditors can directly enforce the joint and several liability. This means that the creditors can make their claims directly against the members. Joint and several liability implies that each member is responsible for the entire amount owed by KommuneKredit.
According to the Danish law on guarantees, this statutory liability acts as a guarantee where each member assumes the role of a primary debtor. If we do not meet an obligation on time, the creditors are entitled to demand immediate payment from any and all members without having to institute legal proceedings.