Hypo Real Estate Holding settles long-running capital investor model proceedings with Gleiss Lutz’s assistance

Gleiss Lutz has advised and represented Hypo Real Estate Holding GmbH (“HRE”) in its settlement of the capital investor model proceedings that began in 2010 and the investor claims still pending.

The settlement is based on section 17 et seq. Capital Investors Model Proceedings Act (Kapitalanleger-Musterverfahrensgesetz), a little-used option in which a settlement in model proceedings ends both them and all suspended main proceedings at the same time. Munich Higher Regional Court approved the settlement negotiated with the current plaintiff in the model proceedings, and has since also declared it valid now that the requisite number of plaintiffs have given their approval. The settlement provides for payments differentiated according to when shareholdings were acquired, the average payment being around 26.5% of the nominal claim.

During the 2008 financial crisis, shareholders had filed damages claims against HRE before Munich I Regional Court for alleged breaches of information requirements relating to capital markets. Some three hundred lawsuits were suspended on account of model proceedings initiated by investors. HRE settled the two largest main proceedings with the then model plaintiff individually in 2022, and has meanwhile also concluded numerous further proceedings on an individual basis. Around one hundred further plaintiffs are affected by this settlement.

A Gleiss Lutz team led by Prof. Eric Wagner (partner) and Dr. René M. Kremer (counsel, both Dispute Resolution, both Stuttgart) advised HRE on the capital investor model proceedings.