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German Investors Denied Rescue Funds
11 Jan
Summary
- Small investors lost everything in German company insolvencies.
- Companies used StaRUG to restructure debts, wiping out stockholders.
- Only major shareholders or creditors were allowed to invest new funds.
In Germany, a growing number of small investors have expressed outrage after losing their investments in companies on the brink of insolvency. These individuals claim they were unfairly denied opportunities to inject further capital into struggling businesses.
Several prominent German firms, such as battery maker Varta AG, auto supplier Leoni AG, and communications-equipment company Mynaric AG, have recently employed a debt restructuring mechanism known as StaRUG. This process has led to the complete elimination of existing stockholders' equity.
Following these restructurings, when the companies sought fresh capital, minority equity investors were excluded. Instead, opportunities to subscribe to new shares were often limited exclusively to major shareholders or significant creditors, fueling widespread discontent.
