EdW - Entschädigungseinrichtung der Wertpapierhandelsunternehmen

Can investor's claims for (partial) compensation become statute-barred?

With the written notification of the decision to grant a partial compensation EdW informs the investor about his/her entitlement and the compensation amount, which can up to now be ascertained only as a partial compensation, and pays the amount within the statutory period of three months (section 5 paragraph 4 sentence 1 of the EAG) to the investor. Then a limitation period of five years begins, after the expiry of which the claim relating to the partial compensation rendered can become statute-barred.

The part of the compensation withheld by EdW (security deposit retained due to putative claims for the segregation of assets) is not subject to any further limitation period. EdW will only be able to determine these "remaining" claims for compensation once it has been legally ascertained whether any segregation assets exist in the Phoenix case and how such assets, if any, are to be distributed among investors. Only after the final decision on compensation has been taken by EdW will a "second limitation period" of again five years (see above) start with regard to the then established "remaining" compensation amount.

In this respect it is unnecessary to submit requests to EdW to waive the defence of limitation.

When does a claim for compensation mature?

Maturity is understood to be the point in time from which the investor may make demands resulting from his/her investment. This point in time is finally regulated in Section 5 (4) of the German Deposit Guarantee and Investor Compensation Act (EAG). According to Section 5 (4) Sentence 1 of the EAG, once EdW has ascertained the entitlement and determined the amount of the claims it has up to three months to fulfill such demands. In other words, the investor - subject to an extension of the deadline in accordance with Section 5 (4) Sentence 2 of the EAG - may not demand payment of compensation until three months after said determination has been made by EdW. Once EdW has established an investor's claim, said investor will receive a written notice thereof. N.B.: A claim remains unmatured until it has been established (see also the judgment of the District Court [Landgericht] of Berlin on 26 June 2008 - no 21 O 132/08).

When will investors receive their partial compensation?

Those investors who submitted their claim for compensation to EdW in full by the end of April 2005 will be notified by EdW during 2009 and can expect to receive their partial compensation before the end of 2009. Decisions about complete compensation claim files that have been received by EdW between May 2005 and mid-June 2005 are scheduled to be taken continuously until about the end of 2010. Investors who submitted their complete files at a later point in time will be informed of the decision taken on their claim until mid-2011.

Can investors’ claims against EdW for compensation become statute-barred?

Claims for compensation can expire no earlier than five years after the establishment of an investor's claim by EdW plus expiry of the three-month period in accordance with section 5 paragraph 4 sentence 1 of the EAG. In special cases the three-month period can be extended by up to three months with the approval of the Federal Financial Supervisory Authority in accordance with section 5 paragraph 4 sentence 2 of the EAG. In these cases the start of the limitation period will be postponed by the period of extension of this deadline.

Will investors receive additional written confirmation of the receipt of the documents they send in apart from the initial confirmation?

For administrative and financial reasons only one confirmation of receipt is issued.

Will EdW report on the results of meetings of the Creditors’ Committee?

Since the Creditors’ Committee is currently undergoing insolvency proceedings, investors can obtain related information solely on the Internet pages of the insolvency administrator at www.schubra.de.

Should an investor register claims with the EdW as well as with the insolvency administrator?

In addition to filing an application for compensation with EdW, the investor may also enter his or her claim for compensation against Phoenix in the insolvency table. The claim may be registered in its full amount.

Will the EdW register the claims with the insolvency administrator on behalf of the investor?

No. Investors are informed by the insolvency administrator in writing and may file their claims independently with the insolvency administrator until September 15, 2005.

Which institution will make repayments to investors?

As part of the process of drawing up an insolvency plan, a consensus needs to be reached on the amount of the claims against Phoenix made by the investors. The next step is to decide on the modalities for the distribution of the insolvency assets. EdW will then be able to determine the amount of the investors’ claims for compensation in the light of pro rata repayments from the assets.

The receiver is pursuing appeals against investors which have received disbursements from fictitious profits. Can investors register a claim for compensation with EdW for the amounts reclaimed?

EdW will make no compensation for fictitious profits.

Is there any point as an investor in joining the pool of claimants against the auditor and tax consultant Dr Puckler?

Setting up a pool of claimant investors against the auditor and tax consultant Dr Puckler is a matter that is entirely separate from the compensation proceedings conducted by EdW; EdW will provide no legal advice in this respect as part of its assigned tasks. Any unanswered questions on the pool should be addressed directly to the law and auditing firm Schulze & Braun GmbH. A list of questions and answers can be viewed on the Schulze & Braun GmbH website under www.schubra.de.

On what legal basis does the EdW operate?

EdW operates on the basis of the Deposit Insurance and Investor Compensation Act (EAG).

What must an investor do to obtain compensation from the EdW?

The EdW will inform the investors who are eligible for compensation in writing on the event of claim and send them a form with which to register the claim for compensation.

What amount of compensation may be awarded?

The amount of compensation awarded for each investor is usually 90% of the claims from securities transactions but not more than EUR 20,000.

Would the fund volume of the EdW be sufficient to satisfy all claimants if they apply for compensation?

The amount of damages that may have occurred cannot be specified at this time. EdW may collect special contributions and take up loans if this were to become necessary for the execution of the compensation proceedings.

Is there an order of priority by which compensation is paid to eligible claimants?

All investors rank equally.