by Johannes Fiala, lawyer
Time and again, large fund companies go bust. For example, Ost-Com, HAT, WGS, etc. have become known. If the investment was financed by a bank, the question arises whether the loan is to be paid back. The answer is: No !
In many cases, the bank was involved in the arrangement of the investment fund. The bank then has a special duty to provide information. The bank shall provide complete and correct information on the opportunities and risks of the transaction. by the way, the bank has to prove it !
If the investment was made through an intermediary and the loan agreement was also made through an intermediary, it should be examined by a lawyer whether the initiator and the bank are liable for incorrect information provided by the intermediary. An initial consultation is suitable for this (a checklist can be requested from the editorial office).
Now the question is, why is the bank not getting any more money? The courts have ruled in favor of the investors. The Freiburg Regional Court (Case No. 5 O 404/98) and, for example, the current ruling of the Nuremberg Higher Regional Court (Case No. 12 W 2417/99) can be cited in this connection.
The bank will be willing to negotiate here to avoid obtaining another judgment awarding damages to the aggrieved investor. The rulings state, for example, that the customer no longer pays a mark to the bank. Yes even more, the investor can demand all his money back !
The banks will try to get a better deal in out-of-court negotiations, for example by lowering the interest rate, partially waiving the loan or suspending repayment without interest. However, you can ask for more !
Does it make sense to join a community of interest? The answer to this question is simple: The community of interest will only be able to make a “general regulation”. Such a regulation can hardly consider your individual case. This is also the way the results look: Instead of getting 100% of the credit amount waived, in the case of HAT only a 30% discount was achieved by the community of interest. Insider munkeln already that this is no clean interest group: So for instance with a social welfare receiver, who will never be able to repay also the offered remaining 70%. For the community of interests a single such case can mean that the public prosecutor’s office begins because of income fraud with investigations. For you as an investor this means that a qualified consultation and representation in your personal case often brings more that a community, which can reach only general regulations.
The credit institutions have different methods to avoid the settlement of claims. Don’t be intimidated by harsh letters and outrageous demands from the bank. Only qualified (written !) advice will give you clarity on whether the bank is just tacting or bluffing. Occasionally you have to take the bank to court to get things moving. In case of doubt, the court will also work towards a peaceful solution, i.e. an acceptable settlement. If the real estate fund is broke and the investment is financed by a loan, you can almost only win in the end result. In almost all cases it is worthwhile not to throw in the towel, but to fight for a bit more justice.
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About the author
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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