A project failed
A project failed
The failure of a project is more than a fictional scenario:
Bankruptcy of Eilhardshof
In July 2010 a project of the Mietshäuser Syndikat failed: the LLC Eilhardshof in Neustadt an der Weinstrasse was forced to file for bankruptcy. Despite all efforts over a period of two years to acquire supplementary financial assistance from banks and the immediate sphere of the project, a foreseeable but blatant increase in construction costs could no longer be compensated. In the end, the bankruptcy assets did not even cover the bank loans ranking above the direct loans; consequently, direct lenders were left empty-handed.
In 2011, to aid the direct lenders affected by the bankruptcy of the LLC Eilhardshof, the Mietshäuser Syndikat founded the association Solidaritätskomitee a solidary committee to collect donations for the above-mentioned direct lenders. Eventually, proportional to the amount of the individual loans, some 115,000 euros of the total loan amount of 400,000 euros were paid out.
Risks for direct lenders
The solidary committee was founded on the initiative of individuals and exclusively pertains to the failure of the LLC Eilhardshof. Indeed, all persons and projects in the Mietshäuser Syndikat endeavor to prevent any further project bankruptcies. Regrettably, though, there can be no guarantee. There also is no guarantee that a further fund to reimburse direct lenders would be established.
The Mietshäuser Syndikat would like to expressly point out here that any liability for accepted loans lies exclusively in the respective project; the Mietshäuser Syndikat cannot provide any safeguards for the refund of loans. However, direct lenders themselves can minimize possible risks by spreading their total loan amount between two, three, or more projects.