The regional court in munich on friday rejected a lawsuit filed by around 270 former investors against the high level of compensation paid in the forced nationalization of the group. The sum of 1.30 euros per share was appropriate, said presiding judge helmut krenek.
A former shareholder burst into tears after the announcement of the decision and had to be calmed by court personnel. Lawyer daniela bergdolt announced that she would appeal to the higher regional court.
The federal government had saved HRE from bankruptcy in 2008 after losses running into billions and nationalized it a year later against the wishes of the former investors. Numerous investors took legal action against this.
The most prominent plaintiff in the proceedings was u.S. Investor christopher flowers, who as a major shareholder in HRE had vehemently opposed the state’s approach and lost around one billion euros with his shares.
After hours of questioning by an expert in the trial, judge krenek saw no evidence that the amount of the compensation was too low in view of HRE’s situation.
The fact that the share price before the nationalization was higher than 1.30 euros was not relevant for the amount of the compensation. The decisive factor in the calculation was the average stock price in the three months prior to the announcement of the squeeze-out.
Lawyer bergdolt was disappointed and spoke of a decision with socio-political relevance. "Every german is advised to buy shares for retirement provisions."This trust is shattered when investors are treated in this way.
"Who still dares to invest in shares now??"HRE used to be considered a fundamentally sound company in the DAX leading index – shareholders can therefore in no way be accused of gambling.
Former shareholder bohdan kalwarowskyj had bought HRE shares for his four children and lost about 20,000 euros. But even more expensive was his legal battle against the state’s action, in which he has invested a lot of time and money over the past few years.
"The costs are slowly approaching 100,000 euros," he said on the sidelines of the trial. Nevertheless, he does not want to give up, he announced after the court’s decision. He is concerned with the fundamental question: "what is the state allowed to do??"