Westfälische Grundbesitz und Finanzverwaltung AG

Westfälische Grundbesitz und Finanzverwaltung AG (WGF AG) was a German real estate company headquartered in Düsseldorf. Founded in 2003 by Pino Sergio, its original business purpose was the acquisition, refurbishment and resale of residential properties, with an initial focus on North Rhine-Westphalia. Over the years the company's real estate expertise expanded to office, hotel and retail properties across Germany. Within the WGF Finanzgruppe Holding GmbH, various subsidiaries handled property management, construction management and other tasks. From 2004 the company issued corporate bonds described as Hypothekenanleihen (mortgage bonds), secured primarily by real estate, rated by Creditreform Rating AG and admitted to trading on the open market (Freiverkehr) of the Düsseldorf Stock Exchange. WGF AG subsequently brought seven further mortgage bonds and two profit-participation certificates (Genussscheine) to market. In mid-2011 the company faced criticism from Düsseldorf lawyer Klaus Dittke that some of its bonds were still being advertised with expired ratings. Doubts also arose about whether WGF AG was earning sufficiently high profits to service and repay maturing bonds, and whether the properties assigned as collateral were of sufficient value. Equity declined and rating downgrades followed. A partly unfair report by Unister Verlag on its portal boersennews.de in mid-2011, using headlines such as "Schneeballsystem mit Anleihen" (Ponzi scheme with bonds), was successfully challenged by WGF AG through an interim injunction; in the later main proceedings before the Cologne Regional Court, the use of most of the contested terms was found to be outside the legally permissible scope, with only the permissible expression of opinion "Schneeballsystem mit Anleihen" upheld. The resulting press coverage put heavy pressure on bond prices and, due to reputational damage, the management board was forced to review its going-concern forecast for the coming financial years. At the end of 2012 the management board commissioned auditors E&Y to assess whether insolvency existed or was imminent, in view of the upcoming repayment of the WGFH06 bond in February 2013. E&Y found that insolvency did not yet exist but that repayment of the WGFH06 bond was at risk of default, making imminent insolvency possible. On this basis the board decided to apply for self-administration. On 11 December 2012 WGF AG filed an application for self-administration under the German Insolvency Code with the Düsseldorf Local Court, submitted by board members Pino Sergio and Paul Zimmer. At a creditors' meeting on 22 May 2013, creditors approved an insolvency plan. Pino Sergio left the management board in October 2013, leaving Paul Zimmer as sole board member. On 11 February 2016 Paul Zimmer filed for regular insolvency proceedings for WGF AG and two affiliated companies with the Düsseldorf Local Court. The company is therefore defunct.

Westfälische Grundbesitz und Finanzverwaltung AG (WGF AG) was founded in 2003 in Düsseldorf by Pino Sergio. Its business purpose at that time was the acquisition and refurbishment of residential properties, with a focus on North Rhine-Westphalia, and their resale. Over the years, the company's real estate expertise expanded to office, hotel and retail properties in Germany. Within the WGF Finanzgruppe Holding GmbH, various subsidiaries were active in property management, construction management and other tasks. In 2004 the company issued for the first time a corporate bond described as a Hypothekenanleihe (mortgage bond), secured primarily by real estate, subjected to a rating procedure by Creditreform Rating AG and admitted to trading on the open market (Freiverkehr) of the Düsseldorf Stock Exchange. WGF AG subsequently brought seven further mortgage bonds and two profit-participation certificates (Genussscheine) to market. In mid-2011, criticism arose from Düsseldorf lawyer Klaus Dittke that WGF AG was still advertising some of its bonds with expired ratings. The board of Creditreform Rating AG confirmed in an interview in August 2011 that the validity of ratings can generally be checked on the Creditreform Rating AG website. Doubts also emerged as to whether WGF AG was earning sufficiently high profits to service and repay maturing bonds in the future, and whether the properties assigned as collateral for the bonds were of sufficient value. Equity declined and rating downgrades followed. A report by Unister Verlag on its web portal boersennews.de in mid-2011, partly unfair, used headlines such as "Schneeballsystem mit Anleihen" (Ponzi scheme with bonds), "Grundsätzlich sind nur 85% der WGF Nennwerte grundbuchrechtlich abgesichert" (In principle only 85% of WGF nominal values are secured by land registry), "Anleihen: Traumrenditen bleiben Illusionen" (Bonds: dream yields remain illusions), "Tatsächlich ist die Beleihung sogar noch höher" (In fact the loan-to-value is even higher) and "Verkaufsgeschäfte mit eigenen Tochtergesellschaften" (Sales transactions with own subsidiaries). WGF AG successfully obtained an interim injunction against this. In the later main proceedings before the Cologne Regional Court against Unister Verlag and the journalist, represented by lawyer Klaus Dittke, the use of the contested terms was assessed as not within the legally permissible scope, and the interim injunction in favour of WGF AG was confirmed. Only in the permissible expression of opinion "Schneeballsystem mit Anleihen" did the court reject WGF AG's submission. Due to this publication, further press reports put high pressure on bond prices, and because of the reputational damage suffered, the management board was forced to review the going-concern forecast for the coming financial years. At the end of 2012, the management board members Pino Sergio and Paul Zimmer commissioned the auditors E&Y to assess in an expert opinion whether insolvency existed or was imminent. The background was the upcoming repayment of the WGFH06 bond in February 2013. At the end of 2012 E&Y determined that insolvency did not exist, but that repayment of the WGFH06 bond was at risk of default and that imminent insolvency was therefore possible. On the basis of this expert opinion, the management board of WGF AG decided to file an application for self-administration with the competent local court. At the same time, the board asked E&Y to provide a going-concern forecast for the restructuring by way of self-administration, which certified a positive outlook. In mid-2011 the management of WGF AG had contacted BaFin over suspicion of market manipulation. Board members Pino Sergio and Paul Zimmer had decided on this step because, due to partly unfair claims and negative press, unusually high volumes with high buy and sell orders were observed at the trading venues. BaFin began investigating the suspicion of market manipulation. In October 2011, WGF AG sold a residential construction project in Berlin Prenzlauer Berg to Aberdeen Immobilien Kapitalanlagegesellschaft mbH before construction work began, with the contractually agreed construction work to be carried out by the Dutch construction group Ten Brinke. The business reports of WGF AG for 2008 and 2009 were corrected in 2011 and published in corrected form in the Bundesanzeiger in 2012. Instead of the previously reported profits, losses were reported for both years in an amount that exceeded equity and led to negative equity. In 2012 WGF AG did not submit the business report for the 2011 financial year within the deadline set by the Düsseldorf Stock Exchange. After an extension for submission of the business report until 30 November 2012 expired without result, trading in the bonds was initially suspended. On 11 December 2012 WGF AG published its annual financial statements for 2011 with a balance sheet loss of 68.5 million euros, a loss not covered by equity of 65.5 million euros, and a... [text truncated]. On 11 December 2012, the WGF AG filed an application for self-administration under the Insolvency Code with the Düsseldorf Local Court, submitted by board members Pino Sergio and Paul Zimmer. At a creditors' meeting on 22 May 2013, the creditors of WGF AG approved an insolvency plan. On 11 February 2016, the sole board member Paul Zimmer of WGF AG, after Pino Sergio had left the board in 2013, again filed an application for regular insolvency proceedings for WGF AG and two affiliated companies with the Düsseldorf Local Court.

• 2016

  On 11 February, Paul Zimmer filed for regular insolvency proceedings for WGF AG and two affiliated companies.

• 2013

  On 22 May, creditors approved an insolvency plan.

• 2013

  Pino Sergio left the management board in October; Paul Zimmer became sole board member.

• 2012

  2011 annual report not submitted on time; trading in bonds suspended; annual financial statements published showing balance sheet loss of €68.5 million.

• 2012

  On 11 December, WGF AG filed for self-administration with the Düsseldorf Local Court.

• 2011

  Criticism over expired ratings; BaFin investigation into suspected market manipulation; interim injunction against Unister Verlag report.

• 2011

  Business reports for 2008 and 2009 corrected, later showing losses exceeding equity.

• 2011

  Berlin Prenzlauer Berg residential project sold to Aberdeen Immobilien Kapitalanlagegesellschaft mbH.

• 2004

  First Hypothekenanleihe (mortgage bond) issued, rated by Creditreform Rating AG and admitted to trading on the Düsseldorf Stock Exchange open market.

• 2003

  WGF AG founded in Düsseldorf by Pino Sergio.

A German real estate company focused on acquiring, refurbishing and reselling residential properties, later expanding into office, hotel and retail properties, and financing itself through mortgage-backed bonds.

• Hypothekenanleihen (mortgage bonds)

  Corporate bonds secured primarily by real estate, rated by Creditreform Rating AG and traded on the Düsseldorf Stock Exchange open market.

• Genussscheine (profit-participation certificates)

  Two profit-participation certificates issued by WGF AG.

1. 1Westfälische Grundbesitz und Finanzverwaltungde.wikipedia.org
2. 2Westfälische Grundbesitz und Finanzverwaltungwikidata.org