It is not uncommon for fund participations to be held via trustees, so that an individual investor cannot get in touch with the other investors in the fund, especially via the commercial register. In such a situation, the Regional Court of Frankfurt/Main, in its judgment of 17 July 2007, ordered the trustee to forward the circular letter of one investor to the other investors. The investor’s goal was to call an extraordinary shareholders’ meeting and then force the fund’s management to provide complete information about the use of funds. Thus Dr. Johannes Fiala, attorney (Munich), MBA financial services (U-niv.), MM (Univ.), examined financial and investment advisor (A.F.A.), lecturer for civil and insurance law (BA Heidenheim, Univ. of Cooperative Education), banker (www.fiala.de) states in its judgement discussion. Excerpt from the judgement discussion: Right to information of each investor In principle the partners taken part in a closed fund have opposite the fondsbetreibenden society a requirement on publication of a list of the names with contact contacts of the Mitgesellschafter, in order to be able to convene a meeting of the partners. Such an obligation to provide information exists in any case if the disclosure of the data of the other co-shareholders serves the exercise of core membership rights and the shareholder has no other possibility to obtain this information. In this case, the other shareholders are obliged to tolerate the disclosure of their data on the basis of their social duty of loyalty – data protection therefore does not stand in the way. The trustee owes the information according to §§ 242 or 666 BGB. The judgement of the LG Frankfurt/Mail is thus also in line with the judgement of the LG Berlin (judgement of 30.10.2000, NZG 2001, 375 ff.). Consequences for investor protection and initiators The judgement strengthens the right penetration for the capital investor – even with illegal use of funds by the management of a fund company, investors could enforce therefore the convocation of a meeting of the partners and require information. In contrast, the initiators often have it in their hands to proceed against “non-permitted client advertising by serial letter”, “advertising with – legally non-existent – collective and sample proceedings” or “interest groups under the direction of lawyers”. Appropriate measures in risk management and investor information can prevent accusations of misappropriation of funds from the outset. Guiding principle of the court: Obligation of a fund-operating company to forward a letter from co-fiduciaries to the trustors in order to convene a shareholders’ meeting.
(DA No 37B/07 of 13.09.2007, p. 3)
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Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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