Germany’s VZB sues former director for investment in insolvent insurtech start-up

Versorgungswerk der Zahnärztekammer Berlin (VZB), the pension fund for dentists in Berlin, Bremen and Brandenburg, is suing its former director Ralf Wohltmann for close to €50m in damages for investments made in now insolvent insolvent insurtech start-up Element Insurance.

The pension fund has filed the claim for damages before the Arbeitsgericht Berlin, the labour court of the German capital. 

The lawsuit was filed at the beginning of the month for “damages” and “breach of duty”, a spokesperson for the labour court told IPE. VZB has confirmed the lawsuit and the amount of the claim.

The legal action relates to unlawful investment made into the insolvent insurtech start-up Element Insurance that led to losses for VZB members, IPE has learnt. 

This is the second proceedint involving the former VZB director that the Berlin labour court is now dealing with. In February, the court ruled that Wohltmann abused his position as director and in the management bodies of portfolio companies. 

The pension fund is seeking damages from former and current executives, consultants, and the state of Berlin responsible for its oversight, in a bid to recover losses made largely from loan financing.

It is demanding €82m in damages, “directly and causally” related to the financial statements for 2023, from auditing firm Baker Tilly, VZB chair Thomas Scheiritz told IPE.

A comprehensive investigation of past investments, considered largely unlawful by the pension fund, is ongoing, with audited figures for 2024 expected later this year.

The magnitude of the losses is estimated at approximately half of the VZB’s total €2.2bn assets. 

However, according to information received by members on 1 April, further losses cannot be ruled out due to the structure of the investment portfolio.

Additionally, pension fund members’ group BUZ 2.0 has said that reliable statements regarding member pensions and entitlements are possible only once the final, independent assessment of the investments and the audit by a new auditor are completed, and actuarial concepts based on reliable data are developed, 

VZB underlines that investigating the causes of the losses, and examining potential claims for damages, are key pillars of action going forward, according to the members’ group. 

Against this backdrop, according to the members, the approach of first establishing a solid foundation for action, and only then making decisions, appears logical.