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Irish investors face massive losses in failed German fund investment

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Over 1,800 Irish investors have been caught up in the collapse of the German Property Group (“GPG”), formerly known as Dolphin Trust.

GPG had raised €107 million from Irish investors by way of issuing loan notes, an unregulated product, for the purpose of buying and renovating listed buildings in Germany, with promises of annual returns of as much as 15%. In late 2019, there were signs of defaults on interest payments on the Irish notes.

Wealth Options Trustees Limited (“WOTL”), an Irish registered Company based in Kildare, acted as administrator and distributor in Ireland for the loan notes, which were sold to investors through a network of 144 brokers. WOTL is the administrator of two Irish special purpose vehicles, MUT103 Limited and Dolphin MUT116 Limited, which are linked to certain investment property securities.

By Order of Mr Justice O’Moore of the High Court dated 10 March 2021, Myles Kirby was appointed the Official Liquidator of MUT103. Mr Kirby has advised Irish investors that he has been gathering information on MUT103 and its investments in GPG, which entered into a formal insolvency arrangement in Germany in 2020. He has advised investors that based on his work to-date, the current values of the German Property assets are a fraction of the total investment and it remains to be seen what funds, if any, will be available to distribute to the investors.

Investors have no recourse to the Central Bank-run Investor Compensation Scheme as these loan notes are not regulated products. Investors could have potential recourse against their brokers if there was any negligence or mis-selling involved. Lavelle Partners are currently advising certain investors in respect of these matters.

For more information, please contact Partner and specialist in professional negligence and financial services disputes, Ciarán Leavy, at 01 644 5800 or [email protected].