The Dolphin Capital investment vehicle will be liquidated by court order

A High Court judge granted an elderly woman’s petition to liquidate an Irish business owned by a bankrupt German real estate company.

r Judge Brian O’Moore issued the liquidation order on Wednesday for MUT 103 Ltd, with offices in Naas, Co Kildare, which is linked to the German real estate group (GDG), formerly Dolphin Capital.

According to the evidence before it, MUT 103 is “manifestly insolvent” and some 107 million euros remain outstanding for Irish investors in GPG, he noted. These investments were made either through MUT 103 Ltd or MUT 106 Ltd.

His decision was influenced by the fact that, while, since July 2019, investors had been continually reassured by Wealth Options Trustees Ltd (WOTL) that the amounts advanced by MUT 103 were fully secured, an options document released there. at five days by Dentons Europe LLP, hired as counsel by WOTL in March 2020, described “a much more precarious position”.

The judge said he was proceeding on the grounds that the directors of MUT 103 Ltd had no responsibility, either morally or legally, for potential issues relating to the security provided to him.

Nonetheless, there was a “glaring difference” between the position on safety described to brokers by WOTL and the situation as presented by Dentons.

MUT 103 had requested the rejection, adjournment or suspension of the request. His lawyer, Peggy O’Rourke SC, said there was a very complicated process and meetings of creditors of Irish loan note holders to assess future options could start soon.

In his judgment, Judge O’Moore said there was “no credible basis” for dismissing the claim of Kathleen Dineen (78), who claims she is owed € 135,000, including € 8,000. of interest.

Ms Dinneen, from Ballincolig, County Cork, suffers from multiple sclerosis and her lawyer Bernard Dunleavy SC said she was “constantly hijacked” when she demanded repayment of her investment. The loan note was for three years and it was due to be repaid in February 2020.

The judge said that if he rejected the petition, the “current unsatisfactory situation” would persist indefinitely.

Unless it issues the winding-up order, the clearly insolvent MUT 103 would continue to be, if not in business, and the only entity dealing with investors would be WOTL which refused for a few months to deal with individual petitions. and instead communicated through “updates” sent to brokers, he said.

WOTL was described by one of its directors as having acted as a director of MUT 103, and of another vehicle, MUT 106 Ltd, “regarding the investment of funds in GPG products from 2011 and as distributor of GPG products in Ireland from June 2018 ”.

The judge said there was no suggestion that the appointment of a liquidator would put investors at a disadvantage in their dealings with the German insolvency administrator.

He would not adjourn the petition to allow the proposed investor meetings to take place, as this would imply that the current directors retain control of the company and that these individuals, either in their capacity as directors of MUT 103 or as directors of WOTL, summon and direct investors. meetings to outline the options available, he said.

He saw no reason why the liquidator could not know the opinion of the investors and neither justice nor equity required the adjournment of the petition.

Despite the “deeply disturbing” allegations that had been made about Dolphin Trust / GPG in July 2019, despite the fact that Dolphin Trust / GPG suspended all payments in December 2019 and despite the fact that GPG initiated proceedings for insolvency in July 2020, the efforts of MUT 103 and WOTL appear to have achieved “little to no culpable benefit” for investors, with the exception of the 19-page options document recently produced by Dentons.

The newspaper Dentons, “rather restricted in its scope”, was not distributed until March 5, four days after the hearing of the petition, he said.

According to this document, the only asset imputed in favor of MUT 103 is owned by Zehdenick in Brandenburg, Germany, he noted. It also appeared that the collateral provided to MUT was not yet competitive and the GPG insolvency administrator informed Dentons, based on the information available to date, he assumes that all loan receivables from the MUT companies against GPG companies are subordinated and therefore the guarantees granted could be challenged.

The judge said that although he had no idea of ​​the merits of this challenge, the validity of the company’s guarantee was in jeopardy and it appeared that the application of the guarantee “might not be straightforward” .

The security obtained by the company, central for the protection of investors, was taken under the surveillance, among others, of the current leaders, he said. For the purposes of the realization of the security and any dispute thereof, it would be preferable for the company to be placed under the supervision of a judicial liquidator. He would therefore issue orders to wind up the company and appoint Myles Kirby as liquidator.

The court had previously heard the GDG collapse last year after taking more than a billion euros from investors in Ireland, the UK, Asia and elsewhere. Funds have been raised from over 1,800 Irish investors through the issuance of loan notes with the aim of purchasing and renovating listed buildings in Germany with pledges of annual returns of up to 15pc .

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