Insolvency Proceedings Opened for d.i.i. 14 and dii. Wohnimmobilien Deutschland 2 Funds
The insolvency of d.i.i. Deutsche Invest Immobilien AG, based in Wiesbaden, has now directly impacted two fund companies. In October 2024, insolvency proceedings were initiated at the district courts in Frankfurt and Wiesbaden for both d.i.i. 14. GmbH & Co. Closed Investment KG and dii. Wohnimmobilien Deutschland 2 GmbH & Co. Closed Investment KG.
For investors in the d.i.i. 14 and dii. Wohnimmobilien Deutschland 2 funds, the risk of financial losses has increased due to the insolvency. As they hold shares that make them co-partners in the funds, they cannot file claims in the insolvency proceedings. However, to mitigate potential financial losses, investors can explore whether they are entitled to compensation claims. This is according to the legal team at MTR Legal Rechtsanwälte, who have extensive experience in capital market law and representing investor interests.
Frankfurt Court Opens Insolvency Proceedings for d.i.i. 14 Fund
d.i.i. Deutsche Invest Immobilien AG filed for insolvency as early as the end of March 2024, citing challenges in the real estate market, including increased construction costs and high interest rates, which ultimately led to liquidity issues. The fund companies under d.i.i. were initially not directly affected by the parent company’s insolvency. However, it soon became evident that the d.i.i. 14. GmbH & Co. Closed Investment KG was also in financial difficulty and would need to file for insolvency.
On October 9, 2024, the Frankfurt district court initiated insolvency proceedings for the fund company (Case No.: 810 IN 598/24 D-17-6). The challenging market conditions in the construction sector were cited as the primary cause of insolvency. Additional investments would have been required to continue the construction projects, but the investors reportedly were unwilling to proceed, leading to the insolvency filing.
Wohnimmobilien Deutschland 2 – Wiesbaden Court Opens Insolvency Proceedings
On the same day, the Wiesbaden district court opened insolvency proceedings for dii. Wohnimmobilien Deutschland 2 GmbH & Co. Closed Investment KG (Case No.: 10 IN 453/24). This public fund had a planned investment volume of approximately €40 million and was set to run until 2033. Private investors could participate in the real estate fund with a minimum investment of €10,000. However, instead of the anticipated returns, investors must now face significant financial losses due to the insolvency.
Investors Must Be Informed About Risks of Investment
To counter these impending losses, investors in the dii. Wohnimmobilien Deutschland 2 GmbH & Co. Closed Investment KG fund can examine whether they have claims for compensation. These claims could potentially be directed against financial advisors who, as part of proper investment advice, are required to inform investors about the risks associated with the investment. Risks include the long duration of the investment, limited tradability of shares, potential total loss, and fluctuations in the real estate market. Experience has shown that real estate funds were often presented in investment advice as low-risk investments and recommended even to security-oriented investors. If advisors failed to disclose or minimized the risks during consultations, investors may have grounds for compensation claims.
Additionally, prospectuses issued for such funds must comprehensively and clearly explain all factors that could influence an investment decision, including the risks involved in the investment.
Compensation Claims for Investors
For semi-professional and professional investors, the standards for investment advice are naturally lower than for private investors. Nevertheless, claims for compensation may still exist and should be reviewed.
MTR Legal Rechtsanwälte, as a legal team with extensive experience in capital market law, advises private, semi-professional, and professional investors in d.i.i. funds regarding their legal options.
Feel free to contact us.
