Insolvency Proceedings Commence for Munich’s Obotritia Real Estate Bank
Over 1,300 investors impacted as Munich District Court rules the bank insolvent amid financial difficulties.
Bankhaus Obotritia GmbH, a Munich-based real estate bank, has entered insolvency as announced by the Munich District Court.
The German financial supervisory authority, Bafin, confirmed that the bank is unable to refund deposits to approximately 1,300 investors, leading to the initiation of a compensation case.
Under this arrangement, the statutory deposit insurance scheme in Germany will evaluate claims from the affected investors.
Typically, payouts from this scheme are capped at €100,000 per depositor, although certain circumstances may allow for higher compensation amounts.
Established in 2019, Bankhaus Obotritia primarily concentrated on commercial real estate transactions but faced significant financial difficulties, which were worsened by the economic repercussions of the COVID-19 pandemic.
Following prior liquidation efforts, Bafin took steps last week to file for insolvency proceedings against the institution.
Michael Jaffé, known for managing the remaining assets of the defunct Wirecard group since 2020, has been designated as the preliminary insolvency administrator for Obotritia.
The German Banking Association has announced that the compensation fund for German banks (EdB) will proactively contact the depositors who are affected by this insolvency.
It is important to note that Obotritia was not a member of the banking association; thus, it did not take part in the voluntary deposit protection scheme provided by the association, which raises concerns regarding the total recovery of deposits for the investors impacted by this situation.
The German financial supervisory authority, Bafin, confirmed that the bank is unable to refund deposits to approximately 1,300 investors, leading to the initiation of a compensation case.
Under this arrangement, the statutory deposit insurance scheme in Germany will evaluate claims from the affected investors.
Typically, payouts from this scheme are capped at €100,000 per depositor, although certain circumstances may allow for higher compensation amounts.
Established in 2019, Bankhaus Obotritia primarily concentrated on commercial real estate transactions but faced significant financial difficulties, which were worsened by the economic repercussions of the COVID-19 pandemic.
Following prior liquidation efforts, Bafin took steps last week to file for insolvency proceedings against the institution.
Michael Jaffé, known for managing the remaining assets of the defunct Wirecard group since 2020, has been designated as the preliminary insolvency administrator for Obotritia.
The German Banking Association has announced that the compensation fund for German banks (EdB) will proactively contact the depositors who are affected by this insolvency.
It is important to note that Obotritia was not a member of the banking association; thus, it did not take part in the voluntary deposit protection scheme provided by the association, which raises concerns regarding the total recovery of deposits for the investors impacted by this situation.
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