Compensation Claims for Investors
7×7 Sachwerte GmbH & Co. KG has filed for insolvency. As announced on the 7×7 Group’s website, the company filed an insolvency application with the Bonn District Court (Case No.: 99 IN 243/24).
Amid the challenging situation faced by the 7×7 Group, numerous concerned investors have contacted MTR Legal Attorneys in recent weeks, fearing for their invested funds. These concerns have likely intensified with the insolvency application of 7×7 Sachwerte GmbH & Co. KG, especially since more insolvency filings for other 7×7 Group companies may follow. Despite the difficult circumstances, investors’ funds may not be entirely lost. In addition to filing claims in the insolvency proceedings, investors may also be entitled to assert potential claims for damages, as noted by the business law firm MTR Legal Attorneys, which, from extensive experience in capital market law, understands that investment advisory processes are not always conducted correctly, potentially giving rise to investor claims for damages.
Further Insolvency Filings for 7×7 Group Companies Expected
The insolvency of 7×7 Sachwerte GmbH & Co. KG comes as no surprise, given that the Group had already announced in mid-October 2024 that various companies in the group would file for insolvency. However, specific companies affected were not disclosed. The 7×7 Group appears to be struggling with a challenging market environment and the lasting effects of the COVID-19 pandemic, rendering insolvency filings unavoidable. Economic issues became increasingly apparent, with delayed payouts and requests for investors to approve extensions of investment periods or convert bonds into subordinated loans. Despite these measures, the group’s financial troubles could not be averted. Ultimately, all stabilization efforts have failed, as communicated by the managing director in a letter dated October 14, 2024.
The 7×7 Group had offered investors various capital investments. According to a report on “Fonds Professionell Online” dated October 24, 2024, 7×7 recently managed assets worth around EUR 86 million. Given the anticipated insolvency filings, investors’ funds are now more at risk than ever.
Claims in the Insolvency Proceedings
Claims with the insolvency administrator can only be filed once the insolvency proceedings have been formally opened. Investors should note that they may not be individually notified of the opening of proceedings. Therefore, careful attention should be paid to the developments to avoid missing critical deadlines and dates.
For investors who granted subordinated loans to 7×7 companies, the situation is especially precarious. Due to the subordination of their claims, these investors must rank behind all other creditors in the insolvency process. Consequently, it is unlikely they will receive any proceeds in the proceedings. However, there are cases where a subordination was not validly agreed upon, as the corresponding clauses may not have been sufficiently clear or understandable for the lender, i.e., the investor. Therefore, it is advisable to register claims in the insolvency proceedings and verify whether the subordination was effectively agreed upon.
Potential Claims for Damages
Since the impending financial losses cannot be offset solely through the insolvency quota, potential claims for damages may also be explored. These claims could arise if investment advisors or brokers failed to properly disclose the risks associated with the investment, especially the risk of total loss. Additionally, the prospectus must inform investors of all material aspects of the asset that could influence their investment decision. In cases of prospectus errors or improper investment advice, investors may be entitled to claims for damages.
To date, the 7×7 Group has only disclosed that an insolvency application for 7×7 Sachwerte GmbH & Co. KG has been filed with the Bonn District Court, with further insolvency applications in preparation. Additional information will be provided once the legal situation has been clarified.
Investors in the 7×7 Group should therefore prepare for further insolvencies and explore their legal options to mitigate financial losses.
MTR Legal Attorneys has been advising injured investors in capital market law for many years. Investors in 7×7 bonds are welcome to contact us.
