The fraud process against the management of the wood processor German Pellets, which went bankrupt seven years ago, has begun in Schwerin.
Regarding the allegations by the Rostock public prosecutor’s office, the defense attorney for the former managing director who was the main accused said after the hearing: “The allegations are inaccurate in the form read out. In particular, the accusation that the three accused had legally formed a gang is inaccurate.” The public prosecutor’s office failed to provide a viable justification. The three accused did not comment.
According to the indictment, which was read out before the Greater Criminal Court of the Schwerin Regional Court, the former managing director and two co-defendants are accused of, among other things, delaying insolvency, fraud, bankruptcy and tax evasion. At the time of the insolvency, the Wismar company was the largest pellet manufacturer in Europe.
Insolvent for almost a year before filing for bankruptcy
According to the investigation, German Pellets GmbH was said to have been insolvent almost a year before filing for insolvency on February 9, 2016. The difference between the funds available at this point in time and the demands is said to have already amounted to a deficit of more than eleven million euros in 2015.
Incorrect information about the company’s situation when selling corporate bonds is said to have ultimately caused investors damage of 7.2 million euros. In addition, despite being insolvent, the company is said to have paid 3.7 million euros for the intended purchase of a coal-fired power plant, which was then sold at a low price. According to the public prosecutor’s office, it is difficult to quantify any damage that goes beyond this, since some claims were settled in the course of the insolvency proceedings.
“Don’t get your hopes up for money back”
The insolvency administrator of German Pellets, Nicolas Rebel, put the total of the claims filed by all creditors against the “Fuldaer Zeitung” at more than two billion euros. According to the statements, the approximately 17,000 private investors in particular should not have too many hopes of getting their money back. He estimates that the bankruptcy process will take another three to five years. Rebel does not see any influence of the court process: “Civil and criminal proceedings are fundamentally separate from one another.”
In opening the defense of the main defendant, his lawyers stated that German Pellets had “not owed a cent” to a Vienna-based intermediary – MFC Commodities – in eleven years of business relationship.
“Economic facts not properly understood”
The public prosecutor, on the other hand, accuses the company of having deceived the business partner when selling and repurchasing wood pellets about the actual quantities of raw materials in the silos. The inventories are said to have been used at the same time as collateral for a million-dollar loan from Commerzbank. According to the words, at the time of the bankruptcy, invoices for the buyback remained unpaid in several cases. From the defense’s point of view, the public prosecutor’s office “did not properly understand the economic facts”.
The lawyers of the former German Pellets managing director accuse the partner MFC of surprisingly attempting to take over German Pellets at the end of January 2016. This led to the inability to pay. It is denied that the company had been insolvent long before that.
The defense attorneys for the main accused describe their client as “basically” responsible for the business relationship with the Austrians. One of the co-accused they take in this regard to a large extent in protection. According to the description, she was only selectively executing, as were other employees. There was no “gang”. The main defendant was also aware of the company’s liquidity situation “up to date” at all times.
