Upheaval at Deutsche Lichtmiete: The controversial successor company Novalumen GmbH is being liquidated. Investor representatives welcome the end of a 'self-enrichment scheme'

Upheaval at Deutsche Lichtmiete:

The controversial successor company Novalumen GmbH is being liquidated;

Investor representatives welcome the end of a ‘self-enrichment scheme’  

One of the most controversial insolvency aberrations in Germany has finally come to an end: Novalumen GmbH, the successor company of the Deutsche Lichtmiete Group that was - allegedly - set up in the interests of creditors, is being liquidated. This means that investors finally have a chance to profit from the considerable assets still contained in the insolvency estate. For insolvency administrator Rüdiger Weiß, this is an opportunity to act in the interests of the creditors and fulfil his statutory duties. 

What exactly happened and what investor representatives are complaining about:

The Munich-based restructuring consultancy One Square Advisors was and is the joint representative of the Lichtmiete bondholders and was therefore required by law to protect their interests exclusively. But no: In this function as joint representative, One Square Advisors brought about a resolution by which all the assets of the Deutsche Lichtmiete Group were transferred to a sister company with an identical group of shareholders (50% Frank Günther, 50% Wolf Waschkuhn, partly via intermediate companies), namely Novalumen GmbH. The joint representative of the bondholders has therefore ultimately procured millions in assets from the insolvency estate for his own good. 

A cash purchase price has not been paid. The insolvency estate and the creditors have not received a single cent to date. It could have stayed that way forever, because: Novalumen only issued a bond as the ‘purchase price’. Payments were only to be made on this bond if Novalumen had generated surplus liquidity of at least EUR 3 million per year. However, this never materialised. This is because the free liquidity was always immediately siphoned off again by invoicing from the sister company One Square Advisors. One Square Advisors issued invoices of up to EUR 180,000 per month to its sister company Novalumen. The services of ordinary employees were invoiced at EUR 350 per hour net. In total, over EUR 1 million was paid from Novalumen in a 6-month period alone. As a result, the insolvency estate has not received a single cent to date.

Dr Wolfgang Schirp from the law firm Schirp Schmidt-Morsbach in Berlin, which represents numerous investors in the Lichtmiete Group, as well as Light Now AG, behind which more than 85% of Lichtmiete's direct investors have now gathered:

‘In my view, the gratuitous transfer of the Lichtmiete assets to Novalumen is one of the most blatant self-enrichment schemes in German insolvency history. The Lichtmiete insolvency estate could never have received a single cent from Novalumen, given the way the contractual relationship was structured. In our view, insolvency administrator Rüdiger Weiß has trampled on the interests of the creditors. ‘ 

Back in 2023, the law firm Schirp Schmidt-Morsbach obtained a judgement from the Oldenburg Higher Regional Court prohibiting Novalumen (judgement of 7 February 2023 - 2 U 8/23) from selling the luminaires of direct investors to third parties without their consent. This prevented unauthorised disposal of the direct investors' property. This was an important first step, as Novalumen had repeatedly attempted to sell the property of direct investors to rental customers without their consent or knowledge. Some of these cases only became known after the sale had taken place, meaning that they could no longer be prevented, such as the ‘Michelin tyre factories’ case, in which Novalumen sold lights from direct investors to Michelin without the owners' consent. Naturally, the owners did not receive any compensation afterwards. Various criminal charges have already been brought against those responsible at Novalumen GmbH.

The second step was to secure the rents or utilisation fees for the leased luminaires owned by direct investors. This is because the lion's share of these rents is also due to the direct investors who own the luminaires. Not even insolvency administrator Weiß disputes this; his own experts have confirmed this result. Nevertheless, he passed on 90% of the rents and compensation for use to Novalumen on an ongoing basis, from where the money was then channelled to One Square Advisors, among others.

In order to stop this unauthorised disposal of the usage fees, Schirp Schmidt-Morsbach Rechtsanwälte initiated preliminary injunction proceedings before the Hamburg Regional Court (case no. 332 O 82/24) and also pursued this in the appeal instance before the Hamburg Higher Regional Court (case no. 11 W 28/24). Under the pressure of these proceedings, the insolvency administrator Weiß was forced to make significant concessions that put an end to the unauthorised outflow of usage fees:      

- In particular, insolvency administrator Weiß submitted an affidavit stating that he had completely stopped forwarding rents/usage fees to Novalumen GmbH as of 28 February 2024.

- He has also affirmed in lieu of oath that he does not intend to resume payments to Novalumen GmbH until further notice. This has put a stop to the ‘bottomless pit’ problem for the time being.

Novalumen GmbH is now being liquidated, as announced by insolvency administrator Weiß and Novalumen itself on the evening of 28 May. Dr Wolfgang Schirp once again: ‘We welcome the fact that the outflow of money has finally come to an end. Great damage has been done to the detriment of the investors. If insolvency administrator Weiß is now prepared for the first time to support serious solutions in the interests of the creditors, we are ready to talk. Even now, there are still assets that urgently need to be secured for the creditors.’

For further information, please contact Dr Wolfgang Schirp, Schirp Schmidt-Morsbach Rechtsanwälte PartG mbB, Leipziger Platz 9, D - 10117 Berlin, tel. 030-3276170 or 0179-5320213, mail: schirp@schirp.com, URL: www.schirp,com