Investors in the insolvent container distributor P&R will be happy. The insolvency administrator may no longer contest payments made by the group before the bankruptcy. This is in a judgment of the Karlsruhe Higher Regional Court, which is now final.
(Photo: Bloomberg)
Berlin Tens of thousands of investors in the insolvent container distributor P&R can keep the funds distributed by the group before it went bankrupt in 2018. So far, there has been the possibility that insolvency administrator Michael Jaffé will have to reclaim these payments at some point.
Background: If a pyramid scheme distributes bogus profits to investors, an insolvency administrator must later contest the payments for a period of four years before bankruptcy. Although P&R is considered a pyramid scheme, there has not yet been case law for the group’s business model. Therefore, Jaffé argued for months in test cases with some investors about the transferred container rents and buyback amounts.
There is now a final judgment on one of Jaffé’s pilot lawsuits, and that is in the interests of investors. “The Karlsruhe Higher Regional Court had decided that there were no claims for rescission in relation to the payments made in the last four years before the application for insolvency,” said Jaffé on Tuesday. The Federal Court of Justice (BGH) rejected his non-admission complaint. The Higher Regional Court judgment is now permanent.
The container service P&R once sold sea containers, leased them back and brokered them to shipping companies. After five years, the company bought back the used containers. Investors were left with returns of between three and five percent, which is why P&R was considered a solid investment.
In the spring of 2018, container sales surprisingly filed for bankruptcy. Since then, more than 50,000 investors have been worried about around three billion euros. Tens of thousands of investors who left in time had to fear that Jaffé would still ask them to pay.
In the test cases, the judgments of the lower instances did not provide a uniform picture. Sometimes the judges ruled in favor of the investor, sometimes in favor of Jaffé.
Further non-admission complaints for the BGH
On the investor side, the judgment was won by lawyer Alexander Pfisterer-Junkert from the law firm BKL Fischer Kühne + Partner. The court found that the payment of the repurchase price and the agreed rents was a “payment against payment” that did not have to be reclaimed, he said. “Clarity has been created for many similar cases of challenge under insolvency law against P&R investors.”
In fact, the BGH has received further non-admission complaints from other pilot proceedings. It is unlikely that the top judges will rule against the line given in these cases. Jaffé referred to the detailed reasoning of the BGH. This is important “because it gives the courts in Germany and the insolvency administrators a guideline on how comparable cases are to be handled”. It is of fundamental importance.
The bankruptcy of the P&R group is one of the biggest investment scandals in the history of the Federal Republic. The group sold around 1.6 million containers to direct investors with advertising slogans about “floating fixed deposits”, although only 600,000 containers actually existed, as Jaffé found out after the bankruptcy.
During this time, old investors were served with money from new investors. When that was no longer enough P&R filed for bankruptcy. However, three key executives died before the judiciary could process the scandal.
Jaffé continues to manage the existing container fleet and recycle old containers. Over the years he wants to save up to one billion euros in investor capital. Most recently, in November 2022, he announced that he had transferred a total of around 350 million euros to creditors.
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