Greensill Bank: Insolvency administrator should get 250 million euros

In March 2021, Bremen-based Greensill Bank AG went bankrupt with a bang. A forensic examination at the time revealed irregularities in the balance sheet. The bank was not in a position to prove larger amounts of the accounts receivable, the Bafin judged at the time and reported the bank to the Bremen public prosecutor’s office for balance sheet manipulation. Numerous creditors were affected, including 50 German municipalities, who were hoping to see their deposits again.

Frege has already wound up Lehmann Brothers Germany and Neckermann

The experienced insolvency administrator Michael Frege, who has already liquidated industrial giants such as Lehmann Brothers Germany, Neckermann and the Maple Bank, was appointed as the fire extinguisher. Research by Business Insider shows that Frege can already point to initial successes. He has already secured assets of 750 million euros for the creditors, which are now being successively paid out to them.

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However, Frege’s services will cost the creditors quite a bit. The insolvency administrator, together with his law firm CMS Hasche Sigle and numerous other law firms in England and Australia, will receive around 250 million euros for the insolvency proceedings. Business Insider learned this from several sources that decide on the amount.

What is the composition of the insolvency administrator’s fee? It basically depends on the amount of the insolvency estate. The principle is: the more money the administrator gets out for the creditors, the higher his remuneration. The share is staggered: from the first 25,000 euros there is 40 percent, from the next 50,000 then 25 percent, from 50 million euros upwards the administrator is still entitled to 0.5 percent of the insolvency estate. Creditors have registered claims of around four billion euros with Greensill.

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Insolvency proceedings are expected to last 15 years

According to research by Business Insider, the insolvency proceedings of Greensill Bank are expected to last at least ten years, insiders even expect 15 years. They emphasize that the procedure is very complex and international. In Germany alone, a team of over 80 lawyers and experts would work on the insolvency. If you included the law firms from England and Australia, you would come to more than a hundred lawyers and experts. Creditors agree that the injured parties are very satisfied with Frege’s work and that the amount of the insolvency costs is not a problem for them.

Large sums for insolvency administrators in the banking industry are not uncommon. Frege and his team are said to have received 800 million euros for the liquidation of Lehman Brothers Germany a few years ago. The high sum was a political issue at the time, and the left criticized the sum as “absurd”. Left-wing politician Sarah Wagenknecht told the “Spiegel” at the time: “800 million euros fee for the settlement of a junk bank. An employee, a medium-sized company or a pensioner can only shake their heads.”