Court Ruling on ThomasLloyd Profit Participation Certificates – CT Infrastructure Holding Ordered to Repay

Court Ruling on ThomasLloyd Profit Participation Certificates – CT Infrastructure Holding Ordered to Repay

Conditions of participation declared invalid by the court. Participation contract is void. Participation capital must be repaid.

At the end of May 2020, the Innsbruck District Court issued a ruling (not yet final) ordering CT Infrastructure Holding Ltd to repay the investment to an investor.

CT Infrastructure Holding Ltd. is the legal successor to ThomasLloyd Investments GmbH, which was previously called DKM Vermögensanlagen AG, and which issued the Global Opportunities Funds as participation certificates. The participation certificates were marketed primarily in Austria and Germany as an investment for private investors. In February 2019, investors received unexpected mail from CT Infrastructure Holding Ltd. stating that the value of their participation certificates was now suddenly zero.

One investor objected to this and brought an action for repayment of the investment capital before the court in Innsbruck. The court has now ruled that some terms and conditions of the profit participation certificates are unclear and therefore invalid. According to European law, this leads to the invalidity of the entire participation agreement. As a consequence, CT Infrastructure Holding Ltd. was ordered to repay the participation capital paid in by the investor in 2005, less the distributions she had already received.

It was not necessary in the proceedings to hear evidence as to whether the balance sheets and profit or loss calculations of CT Infrastructure Holding Ltd. are correct, as this is immaterial. It was therefore not necessary to obtain a costly expert opinion. The question of the invalidity of the participation agreement could be quickly clarified and decided by the court after a brief hearing of evidence.

Innsbruck, June 2020

Stefan Kofler

 

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