What is it all about? The Allgemeine HypothekenBank Rheinboden AG (AHBR) has been out in their speculations. The according to own statements of AHBR expected accumulated loss between 1,1 and 1,3 bn Euros for 2005 stands for a further mass claim at the German capital market. AHBR is an international operating property and bond bank. Up to now, the AHBR is particularly financing industrial and residential trade property projects in Germany. Abroad it is active mainly in the range of industrial loans. With total assets of EUR 77 bn and liable equity of EUR 1,8 bn according to own statements, AHBR is ranking among the major mortgage banks in Germany. On January 2, 2006 AHBR published the following ad hoc announcement: "AHBR expects nagetive annual result for 2005 Frankfurt am Main, January 2, 2006 The Allgemeine HypothekenBank Rheinboden AG (AHBR) anticipates a negative after-tax operating profit for the fiscal year 2005. According to preliminary valuations on the part of the bank this will range in the region of 1,1 and 1,3 bn Euros. Factors are concluding realisation of losses of encumbering interest items and re-valuation of the loan stock in the course of a comprehensive restructuring and re-positioning on the part of the bank after henceforth completed acquisition by the American investor Lone Star.

JUVE, the famous German publication of the lawyers' line ranks the offices in its current guide 2005/2006 as follows: NIEDING + BARTH Rechtsanwaltsgesellschaft "A leading office in the range of investors' protection that as corporation organised is counseling here with long tradition. From competitors classified as "highly dedicated" Nieding + Barth are especially distinguished in the range of bonds. Nieding is first of all nationwide known because of his function as President of the German Organisation for Investors' Protection and as CEO of the German Association for Protection of Bond Ownership ..." TILP Rechtsanwälte "A leading office in the range of of investors' protection since long belonging to the head of the market. Counseled is the field in its whole range, clients are exclusively private and institutional investors. Market observers attest Tilp a "juristic excellent standard ... "

In view of the anticipatory accumulated loss liable equity provided by bonus share creditors and dormant participants will significantly be accessed. Creditors of subordinated registered and bearer bonds are not affected by this action. To aid re-positioning of the bank, Lone Star will accommodate AHBR with new capital adequacy at the beginning of the fiscal year 2006."

The Background

After the long search for a new ownership of AHBR by the previous controlling shareholder, the trade-union holding BGAG, having had dealed with economic problematic cases in the past (keyword "Neue Heimat"). The transferee, the American investment company LoneStar acccording to own statements intends to invest 'fresh' money in the AHBR in order to avoid the bigest bankrupt of a German bank since 1974 ("Herstatt") - at least for the time being. At first management positions have been changed. Furthermore, rigid balance transactions will follow in order to reorganize AHBR. According to meanwhile statements of AHBR and it's new owner in this context most of all the available liable equity of outside holders of bonus shares and undisclosed shares would 'significantly be accessed'.

According to publications, bonus shares mainly in possesion of private investors as per September 30, 2005 are amounting to 567 bn Euros, undisclosed deposits to 372 bn Euros. According to the statement of AHBR no dividends will be distributed in 2005, even redemption rights seem to get "dramatically reduced" according to a speaker of the bank. Detailled information will follow after audited annual balance sheet 2005 - this happens at the earliest by end of the first quarter of 2006.

The new owner of the AHBR, the US-investee Lone Star, has to face resistance against it's draconian reorganisation. Legal conflicts are initiated because many investors do not want to accept that the profit of the AHBR in the course of nine months alters from 13,8 Mio. Euros into a loss in billions' loss.

In the meantime, AHBR has settled out of court with the largest dormant shareholder, DZ Bank AG, and also with DEVK VVaG, another of the dormant shareholders (joint investment: EUR 175 million).  According to press reports, AHBR is repurchasing the capital contributions made by these two dormant shareholders at a rate of "a good 25 % to close to 30%" (depending on whether this is calculated including the costs or without them).  Since it can be counted on that AHBR or, respectively, Lone Star will also settle with the other dormant shareholders at the same rate, this will mean that AHBR will require additional capital in the amount of approximately EUR 100 million.  It is to be feared that this amount will have to be procured from elsewhere – and that possibly, the holders of participation certificates may have to accept further losses.

In order to avoid AHBR to be restructured on the backs of the holders of participation certificates, it is important that they unite and have their rights safeguarded in a focused way by ensuring they have one single, powerful legal representation.  This is the purpose for which we founded the AHBR Working Group.  In particular if we look at how the AHBR dormant shareholders were treated, it is easily recognizable that the new owner of AHBR, the American private equity company Lone Star Funds, will be prepared to make concessions to the holders of participation certificates only if and when they do exactly as the dormant shareholders have done, this being to concentrate to become as tightly knit a group as possible that acts as a powerful counterpart to AHBR.  Only in this way will it be possible for the holders of participation certificates to meet AHBR and its new owner Lone Star at eye level and to enter into the corresponding negotiations.  Our experiences in the pending mass damage claims against Phoenix Kapitaldienst GmbH and AMIS have shown that this strategy works.

What do we offer?

We offer to AHBR investors that we will provide them with full and encompassing representation of their interests.  At the moment, we are clearing up the various aspects of the complicated and interlinked legal situation of the case, while establishing which options are available to us in proceedings out of court and in a court action, and we have held talks with representatives of AHBR in order to protect the interests of our clients.  Furthermore, we have filed – as far as we are aware, the first – claim with a court for compensation of damages against AHBR for holders of participation certificates.  This case is pending.  Further such filings are being prepared on behalf of private and institutional investors.  Concurrently, we have filed a petition to be allowed to initiate a model court procedure in accordance with the Kapitalanlegermusterverfahrensgesetz (KapMuG, Capital Markets Model Case Act).  According to a declaration made by the AHBR Board of Management on April 27th, 2006, € 359.8 million of the capital contributed for the participation certificates was used in order to cover the considerable losses incurred by the bank as a result of its illegal interest rate derivative transactions.  Since this affects many thousands of holders of participation certificates (registered certificates and bearer certificates), the ruling that will be issued by the court on our petition to be allowed to initiate the court case as model proceedings is thus of import beyond the individual legal dispute since it impacts other, similar disputes.  We are proceeding from the assumption that we will have a sufficient number of such petitions for model proceedings in order to pursue a model case before the court, as provided for by the Kapitalanlegermusterverfahrensgesetz (KapMuG, Capital Markets Model Case Act), which procedure is similar to a class action suit.

We will make further information available to you on a continuous basis on this webpage.

If you are interested in an authorisation, you may contact us via our Kontaktformular. Your authorisation will be settled on basis of legal charges according to the Statute of Lawyers' Fee (Rechtsanwaltsvergütungsgesetz, RVG).

Lawyers' Cooperation AHBR – who are we?

Consortium (ARGE) of NIEDING + BARTH Rechtsanwaltsgesellschaft as well as TILP Rechtsanwälte

We are a lawyers' consortium of two German offices for the protection of investors, that since more than ten years performs active protection of investors belonging to market leaders in the range of capital investment legislation and representation of affected investors. Because of our cooperation we created a surpassing magnitude among all laywers' offices, up to now.

We dispose of comprehensive experience in the range of "handling" of major claims. In the case of Phoenix – the major fraud during the German postwar-history – both offices of ARGE-Phoenix care for approx. 3.000 claimants since March, 2005 (www.arge-phoenix.de). In the case of AMIS, up to now the first cross-border mass claim within the European capital market (www.arge-amis.de) since November 2005 about 2.000 claimants are represented by our offices.

What we want to achieve!

By means of our project relating cooperation we are effectively representing your interests as well as those of other investors of the AHBR. For this purpose, the representation of preferably as much as possible claimants is according to our experience inalieble. Particularly the mass claims Phoenix and AMIS made this clear.

Nota Bene

In your own interest, please avoid dubious "communities of interest", "victims' associations", "communities for the protection of investors" or similar. Only entrust the representation of your interests to lawyers that demonstrably since long are effectively acting in the range of the capital market and therefore dispose of the necessary know-how in cases of that majority.