German Stockholders Want a Right to Invest Good Money After Bad

Key Highlights

• In many cases, the companies allowed only big shareholders or major creditors to contribute new money, leaving minority equity investors indignant.
• The result has been complaints on social media from shareholder advocates, as well as legal challenges to restructuring cases.
• Equity investors rebelled against the idea that they were excluded from the chance to participate in the potential recovery of the businesses.
• In the case of Varta, they’re now asking Germany’s constitutional court to rule in their favor in the coming months.
• The complaints have mystified some restructuring experts, who point out that investing in distressed businesses is a risky proposition for small-time shareholders who, in most cases, have already been wiped out.