Dusseldorf At Tengelmann there is still no peace. After the disappearance of his eldest brother Karl-Erivan in April 2018, Christian Haub took over management of the Tengelmann Group in the Swiss Alps. Bought after years of argument the 57-year-old also acquired the shares of Karl-Erivan’s heirs last year. Since then he has owned around 69 percent of Tengelmann, and his brother Georg the remaining 31 percent.
The two remaining brothers announced a partnership last September. “Our common goal is for Tengelmann to continue successfully as a family business now and in the next generation,” said Georg Haub at the time.
But since the end of the year, the 60-year-old has been demanding repayment of 800 million euros to Tengelmann Warenhandelsgesellschaft. He has brought an action for annulment, as the Munich Regional Court confirmed to the Handelsblatt in February 2022.
Christian Haub’s lawyer Mark Binz said at the request of the Handelsblatt that he was “striving for the exclusion of Georg Haub from the family business” because of his behavior. The legal dispute is now also occupying the company’s advisory board.
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The current dispute is about challenging a shareholders’ resolution of December 2 to liquidate reserves in the amount of 1.17 billion euros, which were transferred to the shareholders’ accounts. The plaintiff Georg Haub apparently considers the decision to be invalid because a three-quarters majority would have been required for it.
In a recent letter from the advisory board to Georg Haub, excerpts of which are available to the Handelsblatt, it says: He wants to “cause trouble both in the company and among its more than 70,000 employees and in relation to the banks, to which we now have to explain , that your 800 million euro lawsuit is futile and was only brought abusively to put pressure on your brother and CEO of our company”.
The Advisory Board calls on Georg Haub to drop the lawsuit
The Advisory Board calls on Georg Haub to drop the lawsuit and to enter into negotiations with the supervisory body about a “business agreement”. The supervisory body led by Beiersdorf board member Thomas Ingelfinger fears that otherwise “the reputation of the Tengelmann Group is at stake”.
The Tengelmann company, which has meanwhile relocated its headquarters from Mülheim to Munich, is one of the largest German family companies with a recent turnover of 8.3 billion euros. The group includes the textile discounter Kik, the hardware store chain Obi, the real estate company Trei and shares in the Dax group Zalando and other start-ups.
>> Read here: Mark Binz: “Tengelmann was the case of my life”
An exclusion is provided for cases in which a shareholder breaches the company’s interests in a breach of duty. Christian Haub’s lawyer Mark Binz, who oversaw the purchase of Karl-Erivan Haub’s two children last year, is of the opinion that Georg Haub culpably shattered the relationship of trust with his brother through “repeated erratic and abusive behavior”.
As an example, he cited the fact that Georg Haub suddenly withdrew the joint application for the missing brother Karl-Erivan to be declared dead and thus tried at the last moment to prevent the buy-out of the two nephews, which had initially been advocated.
Another breach of his duty of loyalty to society lies in the fact that he initially gave the impression for months that he wanted to help shape the future of Tengelmann together with his brother Christian after the Cologne family line had left. But then he made the release of reserves required for the purchase price payment dependent on the fulfillment of counterclaims and finally brought an action for annulment.
Georg Haub also seeks advice from experienced lawyers. In the past, the company lawyer Ulrich Korth from the law firm Morgan Lewis & Bockius and Professor Matthias Schüppen from Graf Kanitz Schüppen & Partner worked for him. Schüppen is considered an experienced litigator, both before ordinary courts and in arbitration proceedings. However, the lawyer declined to comment on the case.
Christian Haub has been running the company since Karl-Erivan Haub disappeared in 2018. He now holds around 69 percent and his brother Georg around 31 percent.
(Photo: dpa)
Binz had already referred to two legal opinions to the Handelsblatt in February, which are intended to prove that the release of the reserves would not have required the consent of the minority owner. Should Georg sue against this exclusion, it could result in a year-long legal battle if both parties do not agree on a separation.
In addition to the legal opinion, Binz also refers to a handwritten letter from the father of the three brothers dated July 13, 2011, which is available to the Handelsblatt. In it, Erivan Haub, who died in March 2018, instructed his sons to change the articles of association so that, with a few exceptions, all important shareholder resolutions can be passed with a two-thirds majority in the future.
Binz explained that the partnership agreement was then amended accordingly on December 22, 2011. According to this, a three-quarters majority is only required “in the event of changes to the articles of association regarding the composition and tasks of the advisory board, the minimum distribution and termination and severance pay”.
In a dispute with Karl-Erivan Haub’s heirs, Binz had also threatened to exclude them. But that didn’t happen because Christian Haub bought the shares from the two children for an estimated 1.7 billion euros. Unlike Georg Haub today, Karl-Erivan Haub’s heirs were under pressure to pay inheritance taxes in the hundreds of millions in both Germany and the United States.
More: New family dispute at Tengelmann: Georg Haub is suing his brother Christian.