District Court Frankfurt am Main officially opens insolvency proceedings
The insolvency proceedings for DR Deutsche Rücklagen GmbH were officially opened on August 22, 2025 (File No. 810 IN 212/25 D-10-8). Creditors can now register their claims with the insolvency administrator. Both natural persons and legal entities are involved in the insolvency proceedings, with the rights and obligations of these parties, such as debtors and creditors, playing a central role. Condominium owners’ associations whose reserves were invested in risky bonds of DR Deutsche Rücklagen GmbH should not only rely on an insolvency quota but also consider further legal actions to assert claims for damages.
For many condominium owners’ associations (WEGs), it was a shock to learn that their reserves for renovation and repair work managed by various property management companies were invested in bonds of DR Deutsche Rücklagen GmbH. The risk did not pay off, as DR Deutsche Rücklagen GmbH had to file for insolvency. Consequently, these WEGs now face uncertainty about their funds. In this context, the question arises whether insolvency proceedings represent the proper means for the affected condominium owners’ associations to enforce their claims. The opening of insolvency proceedings offers WEGs and other investors a glimmer of hope since they can now file their claims in the insolvency register by October 14, 2025. Creditors’ meetings for the bonds maturing in 2026, 2029, and 2031 of DR Deutsche Rücklagen GmbH are scheduled for October 16, 2025.
Course of the Insolvency Proceedings
The insolvency proceedings is a complex process, especially significant for condominium owners’ associations, creditors, and debtors. The court responsible for conducting and monitoring the proceedings is the insolvency court, in this case the District Court Frankfurt am Main located in Gerichtsstraße. All essential decisions regarding the insolvency proceedings are made here.
The process begins with the filing of an insolvency petition. This petition can be submitted either by the debtor themselves or a creditor to the competent district court. A prerequisite for opening the proceedings is the debtor’s insolvency or over-indebtedness. The insolvency court examines these conditions carefully before officially initiating the proceedings.
After the insolvency proceedings are opened, the court appoints an insolvency administrator. This administrator takes over management and safeguarding of the debtor’s assets. Their duties include protecting the creditors’ interests, inventorying and valuing assets, and preparing the distribution of the insolvency estate. The insolvency administrator is bound by the regulations of the Insolvency Code and operates under the supervision of the insolvency court.
A central step in the insolvency proceedings is the registration of claims by creditors. Condominium owners’ associations, owners’ associations, and other creditors must submit their claims to the insolvency administrator within the deadline set by the court. The insolvency administrator then reviews whether the claims are justified and includes them in the insolvency table if applicable.
After completing the verification process, the insolvency administrator prepares an insolvency plan. This plan regulates how the debtor’s available assets will be distributed among the creditors. The insolvency plan must be accepted by the creditors and confirmed by the insolvency court before distribution can take place. The distribution follows statutory provisions and is based on the amount of recognized claims.
For condominium owners’ associations and individual owners, it is particularly important to observe the specific regulations of the Insolvency Code. The rights and duties of those involved, for example regarding common property or the administration of reserves, are clearly regulated within the framework of the insolvency proceedings.
Further information about the course of insolvency proceedings, the duties of the insolvency court, and the rights of creditors and debtors can be found on the website of the District Court Frankfurt am Main or directly on site at Gerichtsstraße. It is also advisable, in case of uncertainty, to consult an experienced attorney or insolvency administrator to best protect one’s rights during the proceedings.
Registering Claims with the Insolvency Administrator
Claims should definitely be filed in the insolvency proceedings because only registered claims can be considered by the insolvency administrator. Satisfying creditors is the central objective of the insolvency process, where creditors as a whole should be treated equally from the insolvency estate. The regulation of claim registration and the legal requirements are clearly defined in insolvency law, so creditors must register and prove their claims according to specific guidelines. The role of the creditor is crucial, as only properly registered claims are taken into account during the procedure, with the entirety of creditors at the center of the distribution. The court makes important decisions regarding the process of claim registration and examines the admissibility of the claims. Various motions can be filed within the insolvency proceedings, for example regarding self-administration, discharge of residual debt, or in consumer insolvency proceedings. Debtors also have rights and obligations that are significant for all parties involved in insolvencies. However, homeowners’ associations (WEGs) and other investors must continue to expect significant financial losses, since it cannot be assumed that the insolvency estate will be sufficient to fully satisfy the claims. To counter the impending financial losses, other legal options such as the assertion of claims for damages can be considered, according to the law firm MTR Legal Rechtsanwälte, which advises, among other areas, on real estate and capital markets law.
DR Deutsche Rücklagen GmbH has issued the bonds DR Rücklagen Bond 2026, DR Rücklagen Bond 2029, and DR Rücklagen Bond 2031. Their offer was specifically targeted at managers of homeowners’ associations and was advertised on their website as high-yield and secure investments.
Bonds of Homeowners’ Associations Under Fire
Although property managers are obliged to invest the reserves of the homeowners’ associations securely, i.e., without significant risk, several managers invested the homeowners’ associations’ funds in bonds of DR Deutsche Rücklagen—sometimes without the knowledge of the WEGs. Homeowners’ associations are organized in a residential complex and jointly manage common areas such as staircases and facades. The organization and purpose of the association are primarily governed by the declaration of division and the Condominium Act, which establish the legal framework for property management and owners’ rights and obligations. Members and owners of the association have voting rights proportional to their shares in the property and jointly bear costs, especially through payment of the house fees. The ownership and condominium units are central components of the property and determine membership in the association. The shares and respective ownership portions influence both the owners’ voting rights and the cost distribution within the homeowners’ association. The plan ultimately failed. At the end of 2024 it became known that the company was unable to make due interest payments to investors, and a few weeks later, insolvency proceedings were filed. This put the homeowners’ associations’ funds definitively at risk.
In addition to filing claims in the insolvency proceedings, claims for damages can also be examined to defend against impending financial losses. Although the bonds were advertised as secure, they are in fact risky investments with a high risk for investors up to the possible total loss of invested capital. Investors should have been informed about these risks. If investment advisors or intermediaries concealed or downplayed existing risks, they may be liable for damages.
Trouble with BaFin
Furthermore, DR Deutsche Rücklagen GmbH was not an unknown entity and had already encountered trouble with BaFin. In February 2024, the financial regulator issued a warning because DR Deutsche Rücklagen apparently failed to submit the required prospectus for its 2026 bond. Some time later, BaFin ordered DR Deutsche Rücklagen GmbH to cease and wind down its apparently unauthorized credit business. The company had granted profit-participation loans to project companies in the construction sector. Profit-participation loans are also considered highly risky.
These circumstances do not support the notion that the reserves of homeowners’ associations were invested securely with DR Deutsche Rücklagen. Therefore, the WEGs may also have claims against the property managers who partially invested the reserves in DR Deutsche Rücklagen bonds without the homeowners’ knowledge. There were indications that these were not secure investments. As a result, the property managers may have violated their duty to invest the homeowners’ associations’ reserves with low risk.
MTR Legal Rechtsanwälte advises in capital markets law and real estate law and is available to affected homeowners’ associations as a contact partner and for asserting their rights.
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