DRRT's Global Loss Recovery Blog

DRRT successfully ends 13-year legal dispute for investors in Hypo Real Estate Holding GmbH (HRE) with historic settlement

Posted by DRRT Client Relations on Jun 1, 2022 1:59:11 PM

The court proceedings pending since January 2009 between DRRT attorney Christian Wefers – as model plaintiff for more than 100 DRRT clients – and HRE have now been successfully settled, making history for model proceedings under the German Capital Markets Model Case Act (KapMuG). This settlement follows the settlement of the Telekom model proceedings in 2021, which were the first major German Capital Markets model proceedings and had been ongoing since 2001.

Mr. Wefers, who had sued in the interest of more than 100 institutional investors, was able to work out a mutually desired solution with HRE and negotiate a settlement in the amount of €190 million following the decision of the Federal Court of Justice (December 17, 2020, Case No. II ZB 31/14).

The settlement, confidential in its details, was made possible because all major substantive issues were decided for the parties involved in the model case.

For DRRT, this represents another milestone in the history of the worldwide pursuit of institutional investor protection. This is especially true for Germany. For the first time, capital market law claims of large German and international institutional investors have been successfully enforced against a German credit institution before German courts.

While the Federal Supreme Court of Germany decision in December 2020 and subsequent settlement discussions show that the German system is slow and somewhat cumbersome, they also show that investors can still be successful through the KapMuG process. Currently, several other high-profile cases are ongoing using the KapMuG proceedings (Bayer, VW, Porsche, Daimler, and Wirecard).

DRRT Founding Partner, Alexander Reus, who is the innovative and creative mind behind many large international proceedings, and has already been involved in several billion-dollar settlement negotiations, sees his view confirmed:

"Also in Germany it can be seen that collective investor protection can be quite successful for institutional investors - notwithstanding the formal hurdles that have increasingly appeared in recent years, which distract from the actual problem solving and are thus not efficiency-oriented and goal-oriented."

DRRT attorney Wefers has represented the claims for damages of more than 100 institutional investors, which are spread all over the world, in the proceedings against HRE. DRRT is one of the leading and most creative litigation funders and law firms in the field of global collective investor protection.

The HRE case is one of DRRT's most successful cases, including Fortis/Ageas (Netherlands/Belgium €1.3 billion), Olympus (Japan ¥120 billion), Royal Bank of Scotland (England £850 million) and Sky (Germany €20 million).

If you have any questions, please feel free to contact the DRRT team at ClientRelations@drrt.com