Expiry of an investor’s claim for damages

In 1994, an investor subscribed to a share in a limited liability partnership (Kommanditbeteiligung) in a closed-ended real estate fund to ensure that he had a safe provision for his retirement. After the distributions failed to meet the forecasts for several years in a row, he filed claims for damages based on incorrect advice in 2011. The Federal Court of Justice agreed with the court of appeal’s finding that it should have been evident to the investor at the time of the financial report for 2006, stating that distributions would be 0.12 per cent, at the latest, that the share he had subscribed for was not suitable as a retirement provision. It held that his claims had therefore expired.

However, the court stated that this was not connected to any indications that the partnership share had limited fungibility from the start and that duties to provide information on this point this had been breached. The court stressed that limited fungibility of a closed-ended real estate fund and the lack of suitability of the share as a retirement provision were aspects that should be viewed separately. It said that these facts were subject to autonomous duties to provide information and to advise and that they also had to be treated separately in relation to time-barring.