For many investors, investing in shipping funds was a failure. Besides the financial losses, they may also face the reclaiming of distributions by insolvency administrators.
Shipping funds were long considered high-yield and safe investments and were therefore very popular with investors. However, after the 2008 financial crisis, many things changed and numerous shipping funds went bankrupt. Investors suffered significant financial losses in the process. However, they cannot yet close the chapter on failed investments, as insolvency administrators may approach investors to reclaim received distributions.
As the commercial law firm MTR Rechtsanwälte explains, investors can often defend themselves against the claims of insolvency administrators because there is a lack of legal basis for the claims.
Although the insolvency of the fund company often led to the revival of limited partnership liability, allowing the insolvency administrator to reclaim distributions already received, this only applies if the payouts occurred independently of profit and the insolvency estate is insufficient to satisfy creditor claims without the repayment. Additionally, the statute of limitations must be considered when reclaiming distributions. The statute of limitations period can begin as soon as the insolvency is identified, even before the fund company’s insolvency occurs.
If the fund company demands that investors repay distributions already received, this is only possible if the partnership agreement clearly and understandably states, even for laypersons, that the distributions are merely loans that may be reclaimed if necessary.
After shipping funds were long considered a burned form of investment for private investors due to numerous bankruptcies, they have recently experienced a kind of renaissance. However, global economic and political developments, such as the Ukraine war, could also lead to problems for shipping funds again.
Other risks associated with shipping funds include, for example, the difficulty of trading shares and particularly the risk of total loss for investors. If they were not properly informed about existing risks during advisory meetings, investors may have claims for compensation.
Experienced lawyers in capital market law provide advice.
