The FSCS has begun their investigation into claims against The Dolphin Trust/German Property Group.
The Dolphin Trust, now named German Property Group, is a failed German property investment scheme that holds millions of pounds of UK pension money. The Financial Service Compensation Scheme (FSCS) has started their probe into compensation claims against the firm.
While the FSCS does not normally make compensation payments before a firm has collapsed, the lifeboat scheme has deemed the Dolphin Trust to be “in default” and is therefore acting sooner than usual.
The FSCS has stated of the current investigation:
Some of the information suggests returns to creditors could be uncertain, potentially very low and also take a long time.
For FSCS to pay compensation, we need to be establish a liability on the part of a failed UK-regulated firm arising out of these investments.
The investigation by the FSCS is ongoing, while Smooth Commercial Law are acting for a number of Dolphin Trust/German Property Group investors who are seeking compensation for being mis-sold an investment, usually after receiving advice from an independent financial adviser.
Administrator bemoans ‘total mess’ of The Dolphin Trust books
In addition to the FSCS probe, the German administrator, Goerg, has written to Dolphin investors describing the mess that it has found in relation to the business’s financial records.
Last month, a Goerg partner, Tim Beyer, wrote:
Please note that we have found a total mess over here. It will take at least to the end of September before the insolvency court will have issued court orders for all companies of the GPG group.
And due to the fact that the bookkeeping, the documentation and all other relevant information regarding assets, money, etc. are incomplete, not available in the first place or just a total mess, we probably need at least until the beginning of 2021 before we are in a position to talk about any concrete investment or assets.
Beyer has stated that he believes there are between 150 and 200 companies in the GPG group.
The next step, he told investors, was to get an overview for the whole group - which companies own which real estate, what the status of the real estate is, who the direct creditors are, and which creditor is secured via a mortgage etc.
He said the administrators are doing so with nearly no money on the accounts of the companies of the German Property Group.
Who are The Dolphin Trust/German Property Group?
The Dolphin Trust is an investment scheme that specialises in the refurbishment of listed buildings in Germany. The Dolphin Trust, as it was known in April 2019, claims to buy derelict buildings in prime locations which it then redevelops into luxury apartments. It is now known as German Property Group (GPG).
GPG has borrowed an estimated £600m from UK investors, and told these investors that their money would be safe because of the “First Legal Charge” they would get against the property – a document which entitles the investor to claim their money back from the sale of the property if the borrower fails to repay. As far as we are aware, not one client received their supposed “First Legal Charge”.
The Dolphin Trust/German Property Group hit headlines in May 2019 when a BBC report found that many investors had not received any of the returns on investment they had been promised. Many of the people who have lost money are not experienced investors and have invested their entire life savings into GPG. The BBC report tells of warehouse worker, Roy from Kent, who transferred £35,000 from his pension and expected to receive money back in March 2019. This never came true and the investor had potentially lost the entirety of his pension.
How can Smooth Commercial Law help?
Are you a Dolphin Trust/German Property Group investor? We may be able to help.
If you think you are the victim of a mis-sold SIPP from The Dolphin Trust, or if your SIPP is not performing as you were told it should be, then please get in touch with our specialist mis-sold SIPP solicitors to see if we can claim compensation for you.
At Smooth Commercial Law, our team of experts have experience in dealing with a whole manner of claims that arise from negligent, fraudulent and/or unsuitable financial advice, including unsuitable transfers from pensions. We are seeing an increase in claims for mis-sold pensions and unsuitable investments, and have managed to secure compensation for many of our clients.
Should you have a claim for negligent financial advice, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.