Bremen Greensill Bank Collapse: Charges Dropped Against Monheim Mayor
Overture
Four years after the collapse of the Bremen-based Greensill Bank, which resulted in the city of Monheim am Rhein losing millions of euros, Mayor Daniel Zimmermann has been cleared of any wrongdoing by the Düsseldorf Public Prosecutor’s Office.
Investigation and Findings
The investigation focused on allegations of embezzlement stemming from allegedly inadequate and risky investment decisions. However, according to the Public Prosecutor’s Office, "the initial suspicion of embezzlement with regard to an inadequate and overly risky investment decision was not confirmed with the certainty required for an indictment."
Charges Dismissed
In addition to the charges against Zimmermann, a separate case against a Monheim administrative employee was also dismissed. Zimmermann welcomed the decision, stating that "an independent institution has come to the conclusion that no mistakes were made by the Monheim city administration. All accusations have been proven unfounded."
Focus on Insolvency Proceedings
Zimmermann emphasized the need to move forward and concentrate on the ongoing insolvency proceedings. "We can now put a checkmark on this legal examination and focus on further supporting the insolvency proceedings. The goal is to recover as much money as possible from the insolvency estate."
Background: Greensill Bank Failure
During a period of low interest rates, Greensill Bank offered slightly higher rates than other financial institutions, enticing numerous German municipalities to invest their funds, believing they were secure. Monheim invested approximately €38 million in Greensill.
In 2020, Greensill encountered financial difficulties, and in 2021, it filed for insolvency. The insolvency proceedings have been protracted and are expected to continue for several more years.
Varying Approaches to Recovery
Some affected municipalities have chosen to sell their claims at a significant discount, while Monheim is still considering this option. Selling the claims would provide some immediate funds for the city’s treasury but would likely result in a lower overall recovery compared to patiently waiting for the conclusion of the insolvency proceedings.
Mayor’s Perspective
Zimmermann acknowledged the substantial loss to the city’s treasury but cautioned against hindsight when evaluating the investment decision. "At the time of the investment decision, Greensill Bank had the same rating as Deutsche Bank," Zimmermann explained. "The fixed-term accounts held in Bremen yielded interest rates between 0.08 and 0.3 percent. This did not appear speculative in any way."
Conclusion
The dropping of charges against Mayor Zimmermann and the employee is a significant development in the ongoing saga of the Greensill Bank collapse. Monheim can now focus its efforts on maximizing its recovery through the insolvency proceedings while learning from the lessons of the past.
