Information on proceedings involving Phoenix Kapitaldienst GmbH

Current status of proceedings

03.01.2013

EdW has now completed the compensation process - except for a small number of 29 pending claims for compensation (e.g. inheritance, returned mail). EdW has decided on approximately 71,500 claims for compensation, for which it committed a volume of around EUR 261 million.

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12.09.2012

Through today EdW has decided on some 71,120 claims for compensation for a total volume of approx. EUR 260 million. The number of claims that are still pending has since decreased to merely about 150.

08.06.2012

In the current second quarter 2012, EdW has halved the number of open claims for compensation ("residual claims", see information of 30.03.2012) which now amounts to only about 400. Currently, the total volume of compensation paid is around EUR 259 million.

EdW points out that no interest is payable on Phoenix compensation payments and that extrajudicial legal fees will not be refunded. This has been confirmed by the Superior Court of Berlin in its ruling of 30 March 2012 (KG 9 U 115/11).

30.03.2012

Until the end of the first quarter of 2012, EdW decided on approximately 70,460 claims for compensation, for which it committed a volume of around EUR 256 million.

Among the claims EdW has processed since the beginning of 2012, there are about 25,530 cases for which further decisions were to be made based on the rulings of the Federal Court of Justice (see information from November / December 2011).

Thus, EdW was able to largely bring to a close the Phoenix compensation proceedings - taking into consideration the current highest court ruling. About 810 open claims for compensation still remain as "residual" claims. These concern cases which are currently not yet ripe for decision. For example, cases in which the final decision is not possible at the moment because important documents and information are missing (e.g. certificate of inheritance, evidence of legal succession, identification papers, postal address and bank account, etc). The remaining claims for compensation will be processed by EdW on an ongoing basis, whereby actual completion will depend on the participation of the investor.

10.02.2012

To date EdW has decided on approximately 58,500 claims for compensation, for which it committed a volume of around EUR 238 million. Of those, about 16,780 involve already a decision regarding a second compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights at the time. Furthermore, EdW has already decided on about 13,500 claims for which, according to the most recent ruling of the Federal Court of Justice, the administrative charges and trailer fees are to be compensated for.

In this way EdW takes decisions on further compensations in an ongoing and continuous way - as described by the information on 19 December 2011 - and is on the right track to have granted the remaining compensations to all investors by approximately April 2012.

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19.12.2011

To date EdW has decided on approximately 44,600 claims for compensation, for which it committed a volume of around EUR 205 million. Of those, about 16,500 decisions relate to a second compensation for those investors who have previously received a partial compensation decision subject to the proviso of any segregation rights.

Following the judgements pronounced by the German Federal Court of Justice in exemplary legal proceedings, the opinions held by EdW on various complex legal issues have been confirmed by the highest court ruling in material respects. (See information dated 11 November 2011).

To the extent that the Federal Court of Justice has not confirmed the opinion of EdW in its most recent judgements of September and October 2011 EdW is currently preparing an additional compensation. For this purpose the investor's individual accounts with the Phoenix Managed Account will be recalculated.

EdW is currently planning to grant the compensation payments still due in accordance with the judgements of the Federal Court of Justice to all investors by April 2012. Provided such compensation has not already been made, this amounts to further compensation of 90% of the withholding due to segregation rights as well as administrative charges and trailer fees.

EdW will of its own accord send investors a further written decision supported by an updated account history. As a result of the correction for administrative charges and trailer fees, this will usually show a higher account balance as a basis for calculation. On this basis EdW will pay investors the compensation still due.

Finally, EdW urgently requests investors to inform EdW in writing (not by e-mail) as soon as possible if their address or bank account details have changed (i.e. only to the extent that the account details do not match the data already submitted to EdW).

EdW will send this information to all investors shortly in the form of a newsletter.

15.11.2011

To date, EdW has taken about 40,300 decisions with a total volume of about 186 million EUR. Of these, about 12,250 decisions relate to a second compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights at the time.

11.11.2011

According to the announcement made on 26 September 2011 the Civil Panel XI of the German Federal Court of Justice, in three parallel court proceedings and with judgements rendered on 20 September 2011, confirmed that the claims for compensation filed by Phoenix investors are due and payable in the amount of the withholdings for segregation claims calculated by EdW less the statutory deduction of 10%. In a further exemplary legal proceeding the Civil Panel XI of the German Federal Court of Justice in a judgement rendered on 25 October 2011 decided that EdW was entitled to deduct trading losses actually incurred when calculating compensation claims, but was not entitled to deduct administrative charges and trailer fees accrued since April 1998. The judgements are now available.

EdW is examining potential impacts of the judgements and will provide information about further steps to be taken in the compensation proceedings presumably before the end of the year.

In summary it can be said that the opinions held by EdW on various complex legal issues regarding the Phoenix compensation case have been confirmed by the highest court ruling in material respects. Thus, according to the rulings of the Federal Court of Justice in the judgements dated

23 November 2010 (BGH XI ZR 26/10),

20 September 2011 (BGH XI ZR 434/10, 435/10, 436/10) and

25 October 2011 (BGH XI ZR 67/11)

it has been decided that

fictitious profits are not eligible for compensation,

segregation rights, if any, conflict with compensation and

the premium (Agio) and trading losses have to be deducted from compensation claims.

30.09.2011

To date, EdW has taken about 37,250 decisions with a total volume of about 173 million EUR. Of these, about 9,250 decisions relate to a second compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights at the time.

26.09.2011

On 20 September 2011, the Civil Panel XI of the German Federal Court of Justice announced in three parallel court proceedings that the claims for compensation filed by Phoenix investors against EdW are due and payable. The written judgements have not been received yet.

EdW has already initiated the assessment of the possible impacts of the court ruling. After receipt of the written judgements and a detailed evaluation, EdW will provide information about the continuation of the compensation proceedings and contact investors in writing and of its own accord.

In addition to the judgements pronounced on 20 September 2011, the Federal Court of Justice will take a decision in another exemplary legal proceeding most probably on 25 October 2011 about the still unclarified legal question whether EdW has the right to also deduct trading losses, administration charges and/or trailer fees agreed with Phoenix when calculating the eligible claims. Any further impacts on the compensation proceedings remain to be seen.

19.08.2011

To date EdW has decided on approximately 34,100 claims for compensation, for which it committed a volume of around EUR 160 million. Of those, about 6,200 involve already a decision regarding a second compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights at the time. In this way EdW takes decisions on a second compensation in an ongoing and continuous way - as described by the information on 28 March 2011. The required funds are made available through a second federal government loan to the EdW.

The unclarified legal questions regarding "trading losses and administration charges" (see information provided on 18 February 2011) will be decided on in the highest court most likely in autumn 2011.

16.06.2011

To date, EdW has taken about 30,000 decisions with a total volume of about 140 million EUR. Of these, about 2,100 decisions relate to a second compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights (see information of March 28, 2011).

28.03.2011

In its judgement of 10 February 2011 (BGH IX ZR 49/10 ) the German Federal Court of Justice ruled with binding effect that creditors could not assert a right of segregation with regard to the assets secured by the insolvency administrator of Phoenix. The high court's ruling has provided clarity so that we are now in the position to make further compensation payments with regard to amounts so far withheld (withholding due to segregation rights, if any).

Therefore further progression of the compensation proceedings is described as follows:

EdW intends, in April 2011 to start implementing a second partial compensation proceeding for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights. EdW has set up a second partial compensation schedule for this proceeding. The claims for compensation of the investor submitted in 2005/2006 - as in the first partial compensation proceedings - will be processed in the order they are received by EdW. The investors must not resubmit a claim, but rather we will write them again and approx. three months before the planned decision will receive a further declaration form. The precondition for rapid processing is that the information and documents requested in the new form are submitted to us by the investors in a timely manner. This procedure is necessary, as we must again assess certain requirements for eligibility and decisions in individual cases in order to be able to take a second decision. It is therefore important - also in your own interest - that you fill out the declaration form, which we will send to you separately, carefully in due time. About 22,700 investors will probably receive a second decision on compensation within approx. 18 months. Decisions regarding claims for compensation which have been received by EdW as of 25 April 2005 will be taken on an ongoing basis most likely by the end of 2011. Investors who presented their claims for compensation by 25 May 2005 can most likely expect a decision in the course of the first half of 2012. Investors who submitted their claim later will most likely receive a further decision by the end of 2012.

EdW again asks that you refrain from enquiring by telephone or in writing about the status of your claim and would like to point out that if your address changes, please be sure to inform us in writing (not by email).

03.03.2011

Due to a judgement of the German Federal Court of Justice relating to the subject of segregation rights (BGH IX ZR 49/10) EdW has started, in the context of the ongoing partial compensation proceedings, to take decisions regarding the remaining approx. 3,900 claims for compensation without reserve for any segregation rights. Moreover, in coordination with its supervisory authority, the German Financial Supervisory Authority (BaFin), and the Federal Ministry of Finance (BMF), EdW has started to check whether the prerequisites are fulfilled for a timely implementation of a further compensation for those investors who have already received a partial compensation decision subject to the proviso of any segregation rights.

01.03.2011

To date, EdW has taken approximately 25,500 decisions worth a total volume of around EUR 110 million.

18.02.2011

On the topic of segregation claims:

The Federal Court of Justice delivered a judgement on 10 February 2011 in the declaratory proceedings issued by the insolvency administrator against the Phoenix creditor Citco (BGH IX ZR 49/10).

EdW, which was not party to the proceedings, has thus far only been presented the operative part of this judgment. This implies henceforth that in the case of Phoenix there are no segregation claims to the assets secured by the insolvency administrator. This is a welcome development, as it allows for broader clarity in the compensation proceedings pursued with EdW.

EdW has already began the assessment to determine whether the requirements for making further compensation claims exist and is consulting with the German Financial Supervisory Authority (BaFin) and the Federal Ministry of Finance (BMF) on further steps in the proceedings. EdW is seeking to rapidly process further claims taking into consideration the judgement of the Federal Court of Justice.

As soon as legal certainty is established by examining and evaluating the judgement and the next steps have been agreed with BaFin and BMF, EdW will provide information on the further course of the compensation proceedings.

On the topic of fictitious profits, trading losses and administration charges:

In its judgement from 23 November 2010 (BGH XI ZR 26/10) the Federal Court of Justice confirmed EdW's compensation practice in which fictitious profits are fundamentally not eligible for compensation.

Furthermore, solely for the particular case presented here the Federal Court of Justice denied EdW the authorisation to deduct trading losses and left open the authorisation to deduct administration charges. Accordingly, in this regard no final decision by the Federal Court of Justice exists that applies to all investors. This complex issue will be legally and finally clarified in other already pending cases. Insofar EdW will maintain its current compensation practice until a judgement has been taken by the Federal Court of Justice.

26.01.2011

The Superior Court of Berlin (Kammergericht) has decided with its verdicts announced yesterday in four model cases that based on EAEG law the decision practice of EdW in the case of Phoenix conforms to the law in fundamental points.

The decisions of the Superior Court of Berlin set a precedent for about 500 parallel proceedings currently in progress in Berlin courts. According to the Superior Court of Berlin, investors are not entitled to an advance decision of the EdW outside of the partial compensation proceedings. In addition, the Superior Court of Berlin rejected claims for further compensation where the investors could be entitled to segregation claims. In three proceedings the court awarded the investors a claim only amounting to the management fee charged by Phoenix. These verdicts are not legally binding.

04.01.2011

By the end of the financial year 2010 the EdW has taken decisions on about 24,100 claims, corresponding to 82% of all submitted notifications of claims. Of that, the overwhelming majority with 92% of the investors received a partial compensation payment. The volume committed for the partial compensation payments amounts to about EUR 105 million.

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26.11.2010

Pursuant to the press release dated 23 November 2010 the German Federal Court of Justice (Bundesgerichtshof), in a judgement of the same day (XI ZR 26/10), rejected a claim for compensation with respect to the sham profits resulting from the bank account statements of Phoenix.

The judgement does not affect the question whether the EdW is entitled to make deductions for any possible segregation rights. The written statement explaining the judgement is expected to be published only in a few weeks. The EdW expects that the explanations of the Federal Court of Justice for its decision will also provide further clarifications regarding the calculation of compensation amounts in accordance with the EAEG. On the basis of the grounds of the decision of the Federal Court of Justice the EdW will verify whether and to what extent a new calculation of compensation payments in the Phoenix case is required.

22.11.2010

To date, EdW has taken approximately 23,200 decisions worth a total volume of around 100,150,000 EUR.

08.11.2010

EdW has recently sent letters to all investors, who have so far not received a decision on their claim for partial compensation, or to their authorized representatives announcing that their claims will be reviewed shortly. Provided that investors present the information requested in the letter swiftly and completely to EdW, and provided that all requirements for compensation have been fulfilled in the individual case, the partial compensation proceedings are expected to be concluded by the end of May 2011. Thus, EdW will be ahead, both in terms of the total number of decisions taken and the total length of the partial compensation proceedings, of the compensation schedule, on the basis of which claims for compensation are processed in the order of their receipt by EdW (see also in the section "Frequently Asked Question" under the item "When will investors receive their partial compensation?").

17.08.2010

Up to the present day the EdW has decided on 18,650 claims for which it committed approximately EUR 84 million in partial compensation.

Taking into account those applications that were already ready for decision and processed in 2008 - the majority of which did not involve an entitlement to compensation - EdW has taken around 20,500 decisions altogether worth a volume of approx. EUR 86 million.

03.06.2010

To date EdW has decided on approximately 16,200 claims for compensation, for which it committed a volume of around EUR 73 million in partial compensations.

Taking those applications that were already ready for decision and processed in 2008 into account - the majority of which did not involve an entitlement to compensation - EdW has since taken some 18,000 decisions altogether worth approx. EUR 75 million.

31.03.2010

By the end of the first quarter of 2010 decisions taken on claims for compensation numbered around 14,300. Some EUR 63 million in partial compensation was committed for this purpose.

Taking those applications that were already ready for decision and processed in 2008 into account - the majority of which did not involve an entitlement to compensation - EdW has since taken some 16,100 decisions altogether worth approx. EUR 65 million.

22.02.2010

In the declaratory court case of the insolvency administrator against the Phoenix creditor Citco, the Higher Regional Court of Frankfurt am Main on 11 February 2010 dismissed the appeal filed by the insolvency administrator, as we had anticipated, confirming that the investors of Phoenix have rights to segregation. This ruling by the second instance once again corroborates that EdW's practice of granting partial compensation is appropriate and continues to be warranted. As a result, EdW must continue to proceed on the assumption that the investors have rights to segregation against Phoenix. A definitive clarification can only be brought about by an expected appeal proceeding before the Federal Court of Justice.

Until the segregation rights issue has been settled by the Federal Court of Justice, it will not be possible for EdW to make conclusive decisions on the overall compensation to be paid to each investor, as stated in previous information on proceedings.

In connection with reports that refer to recent rulings requiring EdW to compensate the investors in full, we would like to provide the following clarification:

Most of the legal actions instituted against EdW on the grounds that EdW did not have the right to retain a deduction in determining compensation claims because rights to segregation may exist continue to be dismissed (so far 17 rulings in favour of EdW). Besides, the fact that 49 actions have already been withdrawn and five have been suspended confirms the validity of the procedure of EdW. In the meantime, only one action before a court of first instance, the Berlin District Court, has been largely granted. EdW gave notice of appeal against this proceeding as well because it does not consider the rationale to be true to fact. Both the District Court of Berlin Mitte and the Berlin District Court usually decide in favour of EdW, thus they predominantly share our views.

As there are many proceedings, as some of the courts justify their (not yet legally binding) rulings in diverse ways, and since most judgments currently tend to be in favour of EdW, we will from now on cease to report on the status of proceedings in these postings.

We will, of course, continue to inform you on decisions by the (highest) court that affect the approach pursued by EdW in the compensation proceedings.

In the light of these recent developments we also encourage you to read our "FAQ-list".

14.01.2010

Already in early 2009 EdW reported that it was facing a high number of legal actions under the ongoing compensation proceedings (see information of 24 April 2009). In the meantime the District Court of Berlin Mitte and the Berlin District Court have handed down rulings in favour of EdW in fifteen actions that were filed. The District Court of Berlin Mitte substantially granted the claims in only two proceedings. As these rulings are not convincing in the matter at hand, EdW has given notice of appeal to the Berlin District Court.

Against this background, we would like to point out once again that reports of "successes" issued by sources close to the consumer centre of Thuringia have been spread prematurely. Negative and disparaging remarks about EdW - but also about the consumer centres and other reputable Phoenix associations - are neither appropriate nor of any benefit to the investors (see also our information of 8 June 2009).

Given the uncertainty regarding the existence of segregation rights, it is still not possible to make a conclusive decision concerning the overall compensation that will be paid to most investors. EdW continues to consistently pay partial compensation and will continue to make this practice dependent on the outcome of the ongoing proceedings in the declaratory court case of the insolvency administrator against the Phoenix creditor Citco (see www.schubra.de), which is currently pending at the Higher Regional Court of Frankfurt am Main as the court of appeal. In the first instance the existence of segregation rights had been declared on the merits, which has caused EdW to only release partial compensation payments after deduction of collateral (see information of 25 February 2009).

06.01.2010

EdW is pleased to report that in the recently ended business year 2009 it decided on 10,735 claims for compensation for which it committed some EUR 47 million in partial compensation.

Taking into account those applications that were already ready for decision and processed in 2008 - the majority of which did not involve an entitlement to compensation - EdW has taken around 12,600 decisions altogether worth a volume of approx. EUR 49 million.

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30.11.2009

In its information for creditors dated 16 October 2009 the insolvency administrator described the current state of the debate surrounding the issue of possible rights of segregation. According to this information, a decision is still pending as to whether rights of segregation exist and whether the statute of limitations will apply from the end of the year if such rights do exist (www.schubra.de).

In relation to this concern, EdW has been receiving a growing number of queries in writing and by telephone from investors asking whether EdW compensates a possible right of segregation that could no longer be claimed before a court after the limitation period and whether the investors should sue for compensation of their asserted claims before the end of the year. We would like to take this opportunity to point out (see Phoenix menu item "General Notes") that EdW by virtue of its function does not render any legal advice and does not provide information outside the scope of its functions and responsibilities.

Accordingly, EdW does not provide information on statutory limitations on possible segregation claims in the insolvency proceedings, nor does it issue any other recommendations. Investors are advised to refer to persons or institutions authorised to render legal advice in these matters.

Generally, the following must be taken into account in the compensation proceedings: Rights of segregation pursuant to § 47 of the Insolvency Act are not compensable obligations in the meaning of the Deposit Guarantee and Investor Compensation Act irrespective of whether the investor asserts these rights or not.

Legal actions instituted against EdW alleging that EdW was not entitled to retain a deduction when calculating compensation amounts because of possible rights of segregation have been dismissed. The courts justified their rulings on the grounds that, among others, the investors had a duty to collaborate in enforcing claims against the insolvency administrator to which they may be entitled (see rulings under "Onlinebibliothek" on our German website).

Whether or not investors are entitled to rights of segregation of the customer payments they have deposited remains highly debated. Until this issue has been legally clarified, the insolvency administrator continues to maintain his legal opinion that the funds under administration are not trustee funds. Accordingly, he will issue the same response to investors' queries in this respect. As soon as the rights of segregation have been legally clarified, and, if applicable, after the question of how to distribute segregated assets has been resolved, EdW will decide without delay how to handle the withheld portions of compensation claims. It will take these decisions in the order in which the applications were received. At this point, however, we are unable to determine when this will take place.

The portion of compensation payments retained by EdW (as collateral for possible segregation claims) is not subject to statutory limitation until further notice. Additional information on the topic of statutory limitation on (partial) compensation claims is available under the Phoenix menu item "FAQ list".

To avoid written pledges of partial compensation payments being returned to sender, we would like to remind investors to inform EdW promptly of any changes of address in writing (not by e-mail).

04.11.2009

Thus far EdW has pledged partial compensation to some 8,400 investors. Altogether about 10,200 decisions have been rendered, including those applications that were ready to be decided and already processed in 2008 and whose applicants, in most cases, were not entitled to claim compensation.

The volume of (partial) compensation paid out by EdW through today adds up to some EUR 37 million.

15.09.2009

The processing of the numerous claims that have been received continues to make good progress. Through today EdW has pledged partial compensation adding up to approx. EUR 32 million to some 7,000 investors.

14.07.2009

As the first half of 2009 is now over, EdW is taking the opportunity to inform you of the current status of claims processing:

In the past months partial compensation adding up to approx. EUR 22 million has been pledged to some 5,000 investors, enabling the processing of compensation claims giving rise to partial compensation payments to progress quickly and as planned.

24.04.2009

Since the end of February 2009 EdW has committed partial compensation payments of about EUR 12 million to roughly 2,500 investors.

In the light of recent developments we would like to point out again that EdW processes claims for compensation that have become ready for decision in the order of their receipt by EdW. EdW will maintain this procedure also for investors represented by a lawyer.

In the course of the compensation procedure to date EdW has come under sometimes heavy public criticism and has been faced with legal action with regard to its handling of the matter.

  • It is alleged that no compensation is paid for fictitious profits stated by Phoenix in account statements or balance confirmations and
  • that a number of claims have not yet been decided.

However, all court decisions taken so far have confirmed EdW's procedure with regard to the Phoenix compensation proceedings.

Moreover, the state liability action brought against the Federal Republic of Germany by an investor, who complained about not having his claim for compensation decided, was dismissed by the Berlin District Court in February 2009. The Court did not see any violation of the relevant European Directive on investor compensation and its implementation into German law and did equally not express any doubts about EdW's performance. Meanwhile the verdict has become legally binding.

In addition, in February 2009 the European Commission has dismissed the breach of contract proceedings with regard to this Directive filed against the Federal Republic of Germany due to complaints by Phoenix investors. The European Commission could equally not see any incorrect implementation of the Directive in the Deposit Guarantee and Investor Compensation Act (EAG).

Most recent allegations voiced by some investors' lawyers and consumer protection representatives according to which EdW illegally retains part of investors' compensation payments and delays compensation payments until the claims become statue-barred are wrong and completely unfounded.

As we have pointed out several times EdW is obliged, as a precautionary measure, first to deduct the putative segregation claims of investors when calculating partial compensation amounts, since according to the laws currently in effect, such claims are not compensable. In a judgement given in the insolvency proceedings in November 2008 the District Court of Frankfurt am Main asserted that such segregation claims do exist. In the judgement the segregation claim of an investor was fundamentally admitted. The insolvency administrator has given notice of appeal against the judgement.

EdW also maintains this procedure if an investor is represented by a lawyer.

As regards the limitation of claims for (partial) compensation we refer to the FAQ-list.

25.02.2009

As last announced, EdW has begun rendering partial compensation payments. Thus far several hundred investors have received partial compensation adding up to millions of euros. EdW's personnel resources have again been increased to ensure payment of an estimated total of approx. EUR 128 million in partial compensation over the next 2.5 years. EdW intends to pay out some EUR 45 million more in partial compensation in 2009.

As regards the processing of compensation claims we would like to inform you as follows:

Apart from receiving payment of the calculated partial compensation amount, each investor will be notified in writing.

This notice will contain information

  1. on the partial compensation amount that initially cannot be paid owing to a possible segregation claim and
  2. on the actual development of the investment shares in the Phoenix Managed Account.

To a)
The withholdings determined along with the partial compensation are calculated for each investor individually and therefore are not expressly based on a generally applicable "formula".

As regards the segregation issue we refer once more to the information we provided on 16 November 2007 and to the extensive explanations on the insolvency administrator's website at www.schubra.de.

EdW will decide how to handle withheld portions of compensation claims immediately after the segregation issue and, if necessary, the question of how to distribute segregated assets have been finally clarified by a court of law. It is too early to judge when this will become possible.

To b)
Each investor will receive an overview of the actual development of his/her Phoenix Managed Account. This overview will serve as the basis for the compensation and will also correspond to the claim calculation performed by the insolvency administrator during his review of the claim.

At this stage we would like to mention once again that fictitious profits stated by Phoenix in account statements or balance confirmations are not eligible for compensation.

The District Court (Landgericht) of Berlin passed a judgment on the topic of fictitious profits on 1 October 2008 (4 O 297/08) that EdW has made available on its website in the online library section.

We again expressly ask you to refrain from contacting us to inquire about the state of your claim as this may put the time frame for processing the claims (see above) at risk.

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22.12.2008

The work on the database to enable the calculation of partial compensation payments has since been completed. EdW can now process individual claims for compensation in the order of their receipt by EdW and anticipates that it will be able to begin disbursing partial compensation as early as February 2009. As some 27,500 claims for compensation are still pending, the time required to review and disburse the individual claims will probably take 2 1/2 years.

The interim financing for the compensation payments that is required as per the decision by the administrative court (Verwaltungsgericht) of Berlin from 17 September 2008 (see information dated 23 September 2008) has been assured by a loan granted to EdW by the German Government.

We again ask that you refrain from enquiring in writing or by telephone about the status of your claim so as not to delay speedy processing. EdW will send every investor a written decision on his/her claim for compensation in due time.

13.11.2008

EdW has completed its processing of claims for compensation that have become ready for decision in the interim. Processing of those claims for which a decision could not be taken thus far because the segregation issue has not yet been clarified will continue once the database for calculating partial compensation payments has been finalised and is available.

EdW assumes that the work on the database will be completed and the data will be synchronised by year-end.

In the opinion of EdW, the special contributions to finance the partial compensation payments were collected legally. For this reason EdW, in an exemplary case, has filed an appeal against the decision by the administrative court (Verwaltungsgericht) of Berlin (see information dated 23 September 2008) with the higher administrative court (Oberverwaltungsgericht) of Berlin-Brandenburg.

Since the higher administrative court of Berlin-Brandenburg is not expected to decide on EdW's appeal in the near future, intense parallel efforts to find alternative financing for the partial compensation are ongoing.

23.09.2008

In its ruling of 17 September 2008 the administrative court of Berlin suspended the immediate execution of the obligation of those institutions affiliated with EdW to pay special contributions. The court substantially sustained the motions of the institutions (see information dated 31 July 2008) owing to doubts about the legitimacy of the legal regulations pertaining to the collection of special contributions. EdW is therefore unable to, at short notice, collect the funds needed to finance the partial compensation payments out of the special contributions from the EdW institutions.

EdW is currently considering appealing the court decision. Alternative financing possibilities continue to be examined.

31.07.2008

So far EdW has not been able to generate any significant income from the collection of special contributions to finance the partial compensation payments or compensation instalments because a large portion of the institutions affiliated to EdW have appealed against the contribution notifications and refused payment. The administrative court of Berlin announced it would take a first decision in regard to pending court proceedings in mid-September 2008.

EdW will continue to process decision-ready claims with the remaining funds (see information of 10 April 2008).

The finalisation of the database for calculating partial compensation payments or instalments, which was originally expected for July 2008, will be delayed by about two months owing to technical problems in programming.

30.04.2008

Some individuals and groups involved with investor protection have spread the rumour that a statute of limitations on claims against EdW may be looming, prompting an increasing number of investors to submit queries to EdW regarding this issue. The fact is that there is no reason for concern.

Under the law, investors' claims against EdW become statute-barred in five years (section 3 paragraph 3 of the Deposit Insurance and Investor Compensation Act - EAG). EdW has opted for an investor-friendly interpretation of the start of the limitation period. Accordingly, the period begins on the date on which EdW has established the amount and eligibility of the individual claim of the investor (see also our list of frequently asked questions).

In most cases EdW could not yet decide on possible claims (see previous entries), so that the limitation period for these claims that have been submitted has not even begun.

10.04.2008

EdW has started to take decisions in respect of claims submitted by investors.

Work on calculating partial compensation payments or instalments could not yet be finalised as planned (see our information dated 16 November 2007). EdW assumes, however, that this will be done by July 2008.

Nevertheless, in the meantime some claims can be identified that can be decided conclusively. In particular, this applies to claims that are not entitled to compensation. EdW will disburse compensation in few individual cases for which the compensation amount can already be safely calculated.

EdW will decide on the individual claims in the order of their receipt taking into account their state of readiness for decision.

We kindly ask you to refrain from calling us or writing to us regarding the state of processing of your claim. EdW will inform each investor about its decision in writing.

The collection of special contributions to finance the partial compensation payments has been completed. Many institutions affiliated to EdW have appealed against the contribution notifications. The administrative court of Berlin will issue a decision in this regard shortly.

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16.11.2007

In its ruling passed on 29 October 2007 the District Court (Landgericht) in Frankfurt / Main granted the appeal by the large Irish creditor Citco Global Custody N.V. (Citco) against the insolvency plan in first instance. The insolvency administrator has announced his intention to appeal this ruling. As a result, no payments to creditors are to be expected from the insolvency estate in the foreseeable future (www.schubra.de).

The reason for the appeal was as follows: Citco contended that a large portion of the insolvency assets are not part of the Phoenix asset pool (approx. EUR 162 million of a total of approx. EUR 230 million) and therefore may not be distributed to investors under the insolvency plan. Citco regards these assets as trust assets that are to be paid out directly to the investors, thus backing their claim to segregation.

Citco finds the insolvency plan disadvantageous and would prefer a direct segregation of its deposits. The company could not, however, show how it calculated its putative claim to the segregation and recovery of assets not belonging to the insolvency estate in relation to the claims of all other creditors, yet it is demanding full recovery of its deposits. Citco claims that the payments it rendered shortly before Phoenix claimed insolvency are still in the Phoenix accounts and are directly attributable to Citco.

If this method of evaluation were to be applied, it would mean that the deposits of those investors who paid in shortly before the fraud at Phoenix was uncovered would be segregated out nearly in full. At the same time, those investors who made their deposit payments early would recover less or none of their deposits when the insolvency assets are distributed.

The District Court did not provide a legal assessment of Citco's position since in its view, the confirmation of the insolvency plan was already rescindable for other reasons (www.schubra.de).

It thus remains unclear whether the investors have a claim to segregation and, if so, how the assets would be distributed among them (distribution method). Both points require clarification through a court. The insolvency administrator has announced that a corresponding court ruling has been applied for.

How will the blocking of the insolvency plan by Citco and the difficulties that have arisen in connection with putative claims for the segregation of assets impact the compensation process at the EdW?

As long as the segregation issue remains unclarified, the EdW remains unable to calculate the exact amount of the compensation claims of all investors.

In order to be able to compensate investors, however, the EdW has started preparing partial compensation payments, or compensation instalments. As a precautionary measure, when the partial compensation amounts are calculated, the putative segregation claims of the investors must first be deducted since according to the laws currently in effect, such claims are not compensable.

The EdW will need about 3-4 months to calculate the deductions for each investor. Such calculations are particularly difficult because various distribution methods need to be taken into consideration and no regulations are in place on how to do so.

The EdW is simultaneously preparing the financing for partial compensation, e.g. it is currently collecting special contributions from its affiliated companies.

22.08.2007

A decision has to be taken by the Frankfurt am Main district court in respect of the three complaints that have now been filed against the confirmation of the insolvency plan. The payments to investors from the insolvency assets originally scheduled for the third quarter of 2007 will therefore be delayed (www.schubra.de).

Our information to date indicates what impact the insolvency plan has on the compensation proceedings conducted by EdW and why, despite the fundamental independence of the compensation proceedings, EdW also has to be involved in the planned procedural steps (see our information dated 31 March 2007 and 20 February 2007).

At this point in time it is therefore still envisaged that the compensation payments will be made after the disbursement from the insolvency assets. However, consideration is still being given to the possibility of starting the EdW compensation payments earlier if there is too long a delay in the disbursement from the insolvency assets.

The EdW still requires documents that are missing from investor documentation to be submitted.

Owing to the large number of claims for compensation, we are unable to confirm receipt of documents that are submitted to complete the documentation.

30.04.2007

EdW will base the start of compensation payments on the decision by the District Court in Frankfurt am Main regarding the complaint by a creditor against the confirmation of the insolvency plan in the insolvency proceedings against Phoenix Kapitaldienst GmbH. We expect the District Court ruling to be passed in a few months (see insolvency administrator's information for creditors dated 20 April 2007 under www.schubra.de).

We kindly request you to submit any information concerning changes in your personal situation (in particular, change of address, change of name or bank account) in writing and to refrain from making individual enquiries on the state of the compensation proceedings by telephone or in writing.

12.03.2007

The start of compensation payments by EdW continues to be based on the insolvency plan procedure on which the insolvency administrator last reported in their information to creditors dated 4 January 2007 (see www.schubra.de).

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20.12.2006

The insolvency administrator has provided an overview of the timeframe of the insolvency plan in his latest information for creditors (see www.schubra.de). The start of compensation payments by EdW will continue to follow the timeframe stated in this information.

23.10.2006

The database will soon be finalised. Pending the approval of the insolvency plan, it currently looks as if it will be possible to start making compensation payments in early 2007.

02.06.2006

The representatives of the creditors have assigned the insolvency administrator to draw up an insolvency plan (for more details see also under www.schubra.de). Provided that the insolvency plan has been drawn up and adopted by the end of 2006 (which means that the majority of creditors have approved of the insolvency plan and the insolvency court has confirmed the plan) EdW can presumably start to make compensation payment to the creditors in the first quarter of 2007.

31.03.2006

In the course of March the insolvency administrator, in agreement with the Creditors’ Committee, worked out a basis for decision-making in the insolvency proceedings regarding Phoenix Kapitaldienst GmbH. The aim is to draw up an insolvency plan and, thus, to satisfy the claims of the creditors as swiftly as possible. Creditors’ representatives have already indicated their fundamental willingness to support the planned procedure (see also www.schubra.de).

On the basis of the insolvency plan an amicable solution is to be found to any open legal questions, in particular regarding the size at which creditors’ claims will be assessed. In the next step the modalities for the distribution of the insolvency assets will be determined.

Such an “insolvency plan procedure“ will have impacts on the compensation proceedings pursued by EdW. Although, fundamentally, the compensation proceedings and the insolvency proceedings are different legal matters, EdW has to be involved in all steps planned under the insolvency plan procedure.

In consequence, EdW will not make any compensation payments before the precise insolvency plan has been decided and adopted by the creditors. If EdW were to start making compensation payments before the adoption of the insolvency plan, creditors’ claims would devolve onto EdW in the amount of the compensation payments (§ 5 (5) of the EAG (Deposit Guarantee and Investor Compensation Act)) and this would result in a constant change in the legal position of the other creditors in the insolvency proceedings. This, in turn, would unduly complicate and hamper the drawing up of the insolvency plan.

Thus, in the interest of the creditors, the insolvency plan procedure has to be given priority over the compensation proceedings.

It is scheduled that the insolvency administrator will be assigned in mid-May 2006 by the majority of creditors to finalise the insolvency plan.

In parallel, the works to collect secure data will continue because so far the data bank still has a lot of gaps. Due to the fact that a lot of data has to be entered manually and to unforeseen verifications these works will still take some time. The problems encountered in the establishment of a data bank are due to frequent changes in the bookkeeping and IT systems of Phoenix, as well as entry mistakes in the event of rebookings, currency switches, etc. For this reason EdW will also cooperate with the insolvency administrator in this area and assign additional staff.

20.02.2006

The preparation of facts and figures for processing in a databank at Phoenix is making substantial progress. It is expected that the reliable data can be presented at the end of the first quarter of 2006. EdW again points out that these data are an important prerequisite for all disbursements by both EdW and the insolvency administrator.

On the occasion of the last meeting of the Creditors’ Committee in the insolvency proceedings which was held on February 9, 2006, various approaches to investor compensation were discussed also taking into account different legal aspects. The objective is to achieve a fast disbursement of the funds administered under the insolvency proceedings and to implement the compensation procedure swiftly and efficiently.

Although, fundamentally, the compensation procedure and the insolvency proceedings are different legal matters it became apparent during the discussions on the occasion of the Creditor’s Committee that only joint and coordinated action, especially with regard to the different unclarified legal questions, involving all parties concerned will ensure the rapid start of compensation activities by EdW.

In the context of a possible insolvency plan procedure, the insolvency administrator has been assigned to make preparations for drawing up an insolvency plan (www.schubra.de). The preparations are scheduled to be concluded in the first quarter of 2006.

The procedure practiced by EdW to make compensation must be included in the insolvency plan.

In this respect EdW alone is not able to proceed without observing the regulations agreed in the Creditors’ Committee.

The planned procedural steps are expected to take several months. Only then can disbursements be made.

02.01.2006

EdW ended the old year and began the new year by focusing its efforts on preparing decisions on compensation.

As already mentioned on other occasions, the liability of Phoenix to investors is not necessarily identical to the balance of the investors’ statements from the past few months. The work to bring the databases of Phoenix up to date is still ongoing (see our notice of December 6, 2005).

Not least in order to treat all investors equally, EdW again requests your understanding that an isolated assessment of the growth of the funds of individual investors is not possible at this stage. To ensure that the work proceeds effectively, currently neither instalment nor partial payments are being offered.

EdW also requests investors to refrain from calling or writing to request additional confirmation of the receipt of documents sent in. EdW will conduct a final check of the application documents to verify their completeness during its examination of individual claims and will then contact investors personally if necessary.

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06.12.2005

The Creditors’ Committee met on November 28, 2005. EdW takes this as an occasion to make the following points: The Creditor’s Committee is one body involved in the insolvency proceedings. Since the insolvency proceedings are a process that is separated from the compensation proceedings (see our pertaining notice dated September 15, 2005) the investors can obtain more detailed information on the meeting of the Creditors’ Committee only from the internet pages of the insolvency administrator under www.schubra.de .

EdW continues to work intensively – and in close cooperation with the insolvency administrator – on the reconstruction of the development which the Phoenix Managed Account actually took in the years from 1992 to 2005. Investigations conducted up to now have shown that the business documents and electronic data banks of Phoenix Kapitaldienst GmbH are incomplete and flawed. In addition, it is very time-consuming and difficult to collect all relevant data completely and correctly. A prerequisite for being able to evaluate all claims for compensation, however, is that the development of the shares of every investor in the Managed Account is fully transparent and understandable. This includes all information on changes in the amount of the share held by each investor (such as payments made and received, fees, the actual trading result, and identification of fictitious profits). Given the fact that there are 31.000 shares in the Managed Account, these works will still take some time. For this reason it is not possible for the time being to make any concrete statement on when compensation payments will start. Equally, we cannot provide any information today on the amounts of compensation payments presumably to be made.

In some cases the Phoenix Managed Account was used by the regular bank of investors as security for private loans to such investors. EdW will neither make any current assessment of such securities nor is it possible to issue any statements on claims for compensation, if any, and the amount of such claims to investors or banks.

08.11.2005

We have now issued acknowledgements of receipt for almost all claims for compensation received. If in individual cases investors have not received such an acknowledgement of receipt they are kindly invited to contact EdW per e-mail in order to clarify the matter. Meanwhile, EdW continues to examine the completeness of the documents and to request missing documents, if any.

Pursuant to Article 5, paragraph 3 of the EAG there is a one-year deadline for filing claims for compensation. Nevertheless, EdW calls upon all investors who have received a form for filing applications but have not yet returned the form to hand in their documents as soon as possible. In the event of investors who do not want to pursue their claims further EdW would equally appreciate to receive a corresponding written notice.

Since the whole matter is still very complicated we cannot anticipate for the time being when compensation will start.

11.10.2005

We continue to receive a great number of claims for compensation from all over the world. It is foreseeable that a large part of the approximately 31,000 investors that were informed will file a claim and, thus, will participate in the compensation proceedings. EdW is making every effort to shorten processing times and to reduce the period from the receipt of claims until the dispatch of the confirmation of receipt.

On October 05, 2005 the first creditors’ meeting regarding Phoenix Kapitaldienst GmbH insolvency proceedings was held in Frankfurt am Main. The responsible insolvency administrator, Rechtsanwalt Frank Schmitt, reported, among others, about analyses and examinations commissioned on a number of fake documents. However, in agreement with the Frankfurt prosecutors’ office, which conducts a preliminary investigation, no comments were made on any details of the analyses. More detailed information on the first creditors’ meeting and the insolvency proceedings in general may be obtained from the internet pages provided by the insolvency administrator for the creditors of Phoenix Kapitaldienst GmbH under www.schubra.de .

Since the examination of the documents discovered up to now is difficult and protracted and requires a lot of time, the data base available to EdW for a concrete evaluation of individual claims for compensation is still insufficient. In consequence, EdW will only be in the position in a few months time to start with the verification of individual claims (see also our press release dated August 1, 2005).

For given reasons, we urgently call on all investors to avoid making any unnecessary requests, either by phone or in writing (letters, faxes, e-mails), on the state of processing of your claim or on the general state of the insolvency proceedings. Answering the large volume of incoming requests is very time-consuming and keeps the EdW staff from concentrating on the clarification of the matter and from processing claims for compensation already received.

15.09.2005

We still receive a high number of claims for compensation. The period from the receipt of the claims by EdW until despatch of the confirmations of receipt is some weeks.

If the documents handed in are not complete a corresponding notice to investors is enclosed in the letter of confirmation. In the event that the documents additionally requested by EdW are not, or only partially, furnished by the investors, this does not constitute a failure to observe the deadline for making claims and certainly does not constitute a reason for exclusion of the claim from compensation.

Unfortunately EdW frequently receives filled-in forms from investors who want to file claims in the context of the Phoenix insolvency proceedings (yellow form). We would like to point out again that the insolvency proceedings are separate from the compensation proceedings. For this reason we return this form to the investors with the notice that they have to file their claims directly with the insolvency administrator, Mr. RA Frank Schmitt, whose address is indicated on the form.

01.08.2005

EdW has sent the application form to all investors (more than 30,000) in Germany and abroad. For weeks EdW has been receiving applications in great numbers.

A large portion of the claims for compensation has now been entered into the EdW database. Following a preliminary examination of the documents for their completeness many claimants have already been sent an acknowledgement of receipt with additional information on the further proceedings. We would like to point out once more that each claimant will receive a written acknowledgement of receipt from us. For any documents subsequently submitted to the EdW, however, no additional acknowledgement of receipt will be issued.

Before any claims can be examined in detail it will first be necessary to create a reliable database. Given the criminal insolvency of this case this is particularly difficult and is expected to take another several months. Comprehensive ascertainments are currently being made (such as the reconstruction of the accounts and correction of fictitious commercial results over various business years). The data currently being processed by the insolvency administrator must be considered in the compensation proceedings and will enter into the assessment of claims for compensation.

01.07.2005

The insolvency proceedings for the assets of Phoenix Kapitaldienst GmbH were opened today. More information is available under www.schubra.de .

The compensation proceedings conducted by EdW and the insolvency proceedings conducted by the law firm Schultze & Braun (insolvency administrator: Mr Frank Schmitt, attorney at law) are independent proceedings.

Accordingly, claims maybe filed separately with the insolvency administrator

11.05.2005

We expressly point out that EdW will confirm the receipt of the claims for compensation to each investor in writing. As we have received a large number of claims for compensation and have to examine, in each case, if the documents are complete before sending our confirmation of receipt, in order to immediately ask for the missing documents if necessary, you may have to wait a few weeks before you receive our confirmation.

In order to avoid any unnecessary delays in the compensation procedure, we kindly ask you again to refrain from calling us or writing to us regarding the state of processing or the receipt of your claim.

We would also like to point out that we will automatically contact all investors who did not send us any claim for compensation or other notification in a few months again. As the claim for compensation must be filed at EdW within one year starting from the date you were notified about the occurrence of the event of claim, you need not fear, for the time being, that you might fail to observe the deadline if your claim for compensation should actually have been lost in the mail.

In this connection we request you to submit us all statements of your account at Phoenix Kapitaldienst GmbH. Should you have lost some statements of account, we request you to mention this in your claim for compensation.

30.03.2005

On March 15, 2005 the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) ascertained the occurrence of an event of claim at Phoenix Kapitaldienst GmbH and published this fact in the Bundesanzeiger (Federal Gazette) No. 54 of March 18, 2005. This means that BaFin has established that Phoenix Kapitaldienst GmbH no longer possesses sufficient financial resources to satisfy its liabilities from securities transactions.

The Phoenix Kapitaldienst GmbH is enrolled in the EdW. EdW compensates the investors according to the Deposit Insurance and Investor Compensation Act (EAG). You can file your claim for compensation at EdW in writing within one year starting from the date you received the notification of the occurrence of the event of claim.

According to Article 3 Paragraph 1 of the EAG you as creditor are entitled, under certain conditions, to compensation from EdW. We would particularly like to point out that claims against Phoenix Kapitaldienst GmbH denominated in US dollars are not eligible for compensation.

We will shortly send you a letter including the form to be filled out if you want to make notification of a claim for compensation. We therefore ask you to abstain from making any requests by phone or in writing.

You may also download the form here. Moreover, we would like to draw you attention to the fact that we will send you the form by mail in any case, even if by that time you have already downloaded the form and submitted it to us.

Download (pdf): Claim for compensation

16.03.2005

Die Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de) hat den Entschädigungsfall bei der Phoenix Kapitaldienst GmbH am 15.03.2005 festgestellt.
Wir haben für Sie die wichtigsten Informationen zu den meistgestellten Fragen zum Entschädigungsverfahren zusammengestellt:


FAQ-list

For general questions on investor compensation, go to Information for investors.

Why is EdW not allowed to pay compensation if rights to segregation exist?

The purpose of a right to segregation is to ensure that certain restitution or reimbursement obligations of an institution (in this case Phoenix) are fulfilled even after insolvency proceedings have been instituted. For this reason the inclusion of these protected assets in the compensation is not mandated and rights to segregation cannot devolve upon EdW.

Compensation by EdW is the last instrument provided for by law to protect investors from total loss in case an institution becomes insolvent (in this case Phoenix).

The legal provisions do not provide an option to choose between compensation and a right to segregation.

Are fictitious profits eligible for compensation?

No. Fictitious profits listed by Phoenix in account statements or balance confirmations are not eligible for compensation (see judgement of the District Court [Landgericht] of Berlin dated 1 October 2008 (4 O 297/08) in the Online Library).

In the second instance as well the Superior Court of Berlin passed a ruling on 6 January 2010 (26 U 240/08) confirming that no compensation has to be paid for fictitious profits. In a judgement dated 23 November 2010 the Federal Court of Justice (Bundesgerichtshof) as the highest civil court rejected a claim for compensation resulting from any fictitious profits listed in Phoenix account statements.

Will EdW await the outcome of the insolvency proceedings before it makes final decisions on compensation payments?

No. Rather, EdW will await clarification of the crucial issue concerning the investors' rights to segregation against the insolvency administrator, which are not compensable according to the Deposit Guarantee and Investor Compensation Act. In this regard the Higher Regional Court of Frankfurt am Main affirmed the existence of rights to segregation in its ruling of 11 February 2010. A definitive clarification will only be brought about by an expected appeal proceeding before the Federal Court of Justice. A decision is expected to be made only in the first quarter of 2011.

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.


General Notes

  • You will find periodic updates of the situation here on our homepage.

  • Please understand that we are unable to send individual replies to written queries (letters or e-mails) given the time-consuming work of attending to the large number of claims. We also urge you to refrain from telephone queries as far as possible.

  • In the event of any changes in personal data such as address, bank account or other data, please send them to us in writing by letter so that we can update your contact data in our database.

  • By virtue of its function EdW does not render any legal advice.

  • We provide information on the compensation proceedings in German, English and French in the Internet. In personal contacts we supply information for foreigners in the English language.

  • Useful links:
    www.schubra.de
    www.bafin.de


Form sheet

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