Investors’ claims for damages
Munich’s district court – the Amtsgericht München – officially opened bankruptcy proceedings on October 30, 2023, against Euroboden GmbH, citing insolvency and over-indebtedness (case ref.: 1509 IN 2357/23). Investors who are concerned about the prospect of financial losses can turn to an experienced capital markets lawyer.
The current crisis plaguing the real estate market continues to claim its victims. Euroboden GmbH is just the latest in a series of real estate developers that have been forced to file for bankruptcy. The company, which specialized in luxury properties, was able to raise money from investors by issuing two bonds. This money is now at risk. Besides registering their claims within the framework of the ongoing insolvency proceedings, investors can also have someone review their claims for damages, notes commercial law firm MTR Legal Rechtsanwälte, one of whose areas of expertise is capital markets law.
Delisting of Euroboden bonds
The company issued two corporate bonds – 2019/2024 (ISIN: DE000A2YNXQ5) and 2020/2025 (ISIN: DE000A289EM6) – offering an interest rate of 5.5 percent p.a., with reports indicating that this drew in around 90 million euros from investors. The bonds are due for repayment in October 2024 and November 2025, respectively. But now that Euroboden GmbH has gone bankrupt, those who invested in the company can forget about this. The bonds are barely worth anything anymore and are set to be withdrawn from the Frankfurt Stock Exchange. The final day of trading is expected to be December 13, 2023.
This means that the investors are looking at significant losses. To prevent or at least minimize the impact of this outcome, their first step should be to register their claims with the insolvency administrator by January 15, 2024. In doing so, they must specify the basis and the amount of their claims. That being said, it cannot be assumed that the assets in the insolvency estate are sufficient to cover the claims of all creditors in full.
Informed about risks
With this in mind, the investors can then set about having someone review their claims for damages. Euroboden GmbH has pointed to the challenging real estate market as the reason for why the company went bankrupt. High interest rates, soaring costs, and a simultaneous slump in demand are supposedly what led to the company’s economic problems. The takeaway from this is that investments in real estate are by no means as safe as they are often made out to be. On the contrary, investors are taking major risks with their investments, which could end with them losing all the money they have invested.
Investors should have been informed about these risks in the context of receiving proper investment advice. If this was not the case, they can have someone look into the possibility of asserting claims for damages.
As a full-service law firm whose fields of expertise include capital markets law, we at MTR Legal Rechtsanwälte can assist those who have invested in Euroboden GmbH in enforcing their rights.
Get in contact with one of our capital markets law experts today!
