Flick Gocke Schaumburg achieves another stage win for Infinus investors against actions for rescission by the insolvency administrator

Flick Gocke Schaumburg has notched up another stage win in the legal dispute over the repayment of interest from participation rights for the investors of the insolvent Infinus Group. The Higher Regional Court of Koblenz today rejected the appeal filed by the insolvency administrator and ruled that the interest on profit participation rights paid out was not free of charge within the meaning of section 134 of the German Insolvency Code (InsO) (file number 3 U 321/19).

The judgment follows a series of successful defensive actions by Infinus investors against the insolvency administrator for the assets of Prosavus AG, a corporation of the insolvent Dresden-based Infinus Group. Since the end of 2017, the insolvency administrator has been claiming repayment of profit-related interest on profit participation certificates from several thousand investors. He is of the opinion that these interest payments constitute contestable gratuitous payments within the meaning of section 134 of the Insolvency Code. Prosavus had operated a pyramid scheme and reported only fictitious profits in its annual financial statements, which had nevertheless been certified by an auditor. This was known to the Prosavus management board.

Several hundred investors, represented by Flick Gocke Schaumburg, object to this, arguing that the accounting on which the annual financial statements are based was undoubtedly correct. The management board was entitled to rely on the auditor’s certificate. The alleged operation of a pyramid scheme does not necessarily generate losses under commercial accounting law.

Nearly all first instance courts that have already ruled on the matter have dismissed the insolvency administrator’s claims. In the second instance, the Higher Regional Courts of Munich (file number 5 U 546/19) and Schleswig-Holstein (file number 9 U 26/19) also ruled in favor of the investors represented by Flick Gocke Schaumburg. The insolvency administrator has lodged an appeal against the judgment of the Schleswig-Holstein Higher Regional Court. The proceedings are pending before the Federal Court of Justice under file number IX ZR 247/19; the hearing will take place on May 28, 2020.

Advisors to Infinus Group:

Flick Gocke Schaumburg (Bonn): Lambertus Fuhrmann (lead), Alexander Löschhorn, Andreas Heinrich, Christoph Merks (all litigation/arbitration)