Green City AG (Green City) operates renewable energy plants, not least through numerous subsidiaries. Calling itself an “energy turnaround company”, Green City AG has raised around 250 million euros in investor funds in recent years to finance wind power, hydroelectric and solar projects in Germany and throughout Europe. For the most part, this is equity raised in order to be able to take on further debt capital from lending banks. The investments acquired from investors are spread over numerous different investment products and various companies within the Group.

The financial instruments and investment products offered by the Green City companies include:

− Shares („Aktien“),
−  Corporate bonds (in particular German bearer bonds, so-called „Inhaberschuldverschreibungen“, both subordinated and non-subordinated)
− „Genussscheine“(German mezzanine financing instruments)
− „Geschlossene Fonds“ (Closed-end funds)

Investors must now fear losing their invested capital in the “green investments” of Green City. The reason for this is: Green City AG is in massive payment difficulties and on January 24, 2022 filed an application with the Munich Local Court to open insolvency proceedings, due to over-indebtedness and imminent insolvency. On January 26, 2022, the Munich Local Court finally ordered provisional insolvency administration over the assets of Green City AG.

As a result, investors have to expect very high losses. A large part of the money raised from investors is invested in subordinated bonds. The claims of these investors are only be satisfied in insolvency proceedings if all the claims of all non-subordinated creditors, first and foremost the claims of the lending banks, have been successfully satisfied in full. It is true that a large part of the investor capital is not directly invested in Green City AG, but in its subsidiaries. However, the difficulties at Green City AG also affect its subsidiaries.

The subsidiaries are not spared from the development at Green City AG and an even greater chain reaction is to be expected than is already the case. Several subsidiaries have already filed for insolvency proceedings. These are the following companies:

− GCE Kraftwerkspark I GmbH (on January 21, 2022).
− SUMMIQ AG and its subsidiary SUMMIQ Management GmbH (on February 14, 2022)
− Green City Energy Kraftwerkspark II GmbH & Co. KG (on February 16, 2022)
− Green City Energy Kraftwerkspark III GmbH & Co. KG (on February 16, 2022)
− Green City Solarimpuls I GmbH & Co. KG (on February 16, 2022)

It is now to be feared that further Green City companies will follow Green City AG and in turn each file an application for the opening of insolvency proceedings. WEISSWERT represents the interests of investors in the Green City case and is examining possibilities for the rescission of various capital investments and claims for damages. According to our knowledge, the following financial instruments are affected:

Green City investors can register with WEISSWERT free of charge. We will send you further information and we will check your further options to obtain compensation free of charge, i.e. whether and if so against whom you can assert claims in order to obtain compensation.

In addition to filing their claims in the insolvency table, investors should have it examined whether they are entitled to further claims. In particular, claims against those responsible for the prospectus as well as against financial advisors and brokers come into consideration: Investment advisors and investment brokers are liable in the case of incorrect advice, i.e. in particular if advice was not given in a manner appropriate to the investor’s investment objectives or if information about kickbacks was not properly disclosed.

We will examine your individual case. Especially with regard to claims against financial advivors, it is not possible to make general statements about the prospects of success: This depends to a large extent on the circumstances of the individual case. A careful examination in the run-up to legal action is indispensable if you do not want to run the risk of “throwing bad money after good money”.

Of course, we also advise you with regard to the (preliminary) insolvency proceedings. In this regard, you need to know that your prospects of recovering money depend in particular on the specific financial instrument you have acquired. As we already described at the beginning, the chances of recovering money in the event of liquidation are poor for all subordinated bonds. The same applies to mezzanine financing („Genussscheine“) and closed-end funds („Geschlossene Fonds“). Shareholders, as equity investors, are also generally left “empty-handed”. However, we do not believe that tort claims can be ruled out at present. We are currently still examining and keep you informed. Should tort claims exist, we firmly believe that the resulting claims in insolvency proceedings should be treated as claims ranking in accordance with section 38 of the German Insolvency Code (InsO). In other words, these claims are in such a csse not subordinate. In such a case there is hope of recovering money by filing claims in the insolvency proceedings. For further information, please do not hesitate to contact us for a free initial consultation.