Asset Recovery and Pending Claims

Compensation/Sales

The Successor Organization generated revenue of approximately €8.9 million from sales and compensation in 2020.

Furthermore, the CC received rental income prior to the sale of properties of approximately €86,500. Expenses relating to the maintenance of property pending sale were approximately €71,200.

As of the end of 2020, the CC had filed 124,891 claims to cover real estate and businesses, as well as additional claims for smaller types of assets. These smaller claims are being handled separately from the real estate and business claims.

For the real estate and business claims, the German restitution authorities had issued confirmed or pending decisions on 123,191 claims, of which approximately16,967 claims (almost 14 percent) were approved for the CC. Of these rulings in favor of the CC, restitution (actual return of the property) was awarded in 27 percent and compensation (e.g., where restitution was not possible or where the business was no longer in existence) ordered in 73 percent.

With respect to recovered property, the CC sold the largest, most valuable assets first, meaning that the properties sold subsequently generated less revenue than those previously recovered and sold.

The compensation awards are generally much smaller in amount than would be obtained from the sales proceeds of the same properties, were they restituted. Much of the remaining income of the CC will be from compensation payments.

Of the real estate and business cases in which the CC has received compensation for the assets, approximately two-thirds of the cases to date have been real estate claims.

However, of the pending cases still to be processed, the majority are claims for business assets. A large part of the processing by the German authorities for real estate claims has taken place and the processing of business assets is now under way. Recovery of a business asset usually generates a compensation payment that is far lower than the value of a recovered real estate claim.

Following intense negotiations over several months in late 2017 and early 2018, the following general settlement was reached regarding remaining open claims:

  • i. Approximately €30 million for about 1,600 pending claims, with the right to remove up to 30 claims from the settlement and have them processed individually, with the CC paying back the average amount received per claim in the settlement for each “pulled” claim; and
  • ii. About 500 claims, involving Goodwill Fund and Late Applicants Fund claims, are excluded from the settlement and will be resolved individually by the German authorities. The value, if any, of all remaining claims will be resolved between the CC and the German Finance Ministry.

In light of the diminished number of pending SO claims, it was determined that the SO would close by December 31, 2020. Given the COVID-19 pandemic, the close date has been moved to late 2021.

Claims and Types of Recovery

Claims filed by the Claims Conference fall into two major categories:

  • Real estate
    These are claims for real estate formerly owned by individuals.
  • Businesses
    These are claims relating to a former business and generally consist of claims that receive a compensation payment only.

The German restitution agencies processed the claims on the largest and most valuable properties first. This means, that the properties to be recovered and sold in the future will generate less revenue than previously recovered properties. The income to date includes unique claims such as those relating to the Wertheim family.

Further, a large part of the processing by the German authorities for real estate claims has taken place and the processing of business assets is now under way. Recovery of a business asset usually generates a compensation payment that is far lower than the value of a recovered real estate claim.

The following are the major forms of recovery of assets by the Claims Conference:

  • Restitution
    This is the return of an actual item of property. The Claims Conference has a well-developed procedure for selling such properties.
  • Compensation
    This is a compensation payment for a property which is not recoverable or for a business no longer in existence. Generally, compensation payments are for lower amounts than the value of restituted assets. Smaller types of recovery and claim are for certain cash assets, moveable assets or mortgages.

Assets/Potential Assets

There are three categories of assets or potential assets that could be recovered by the Claims Conference Successor Organization.

Properties That Have Been Recovered But Not Sold

As of December 31, 2020 the estimated value of unsold property as audited, after taking into account commitments, is approximately $726,000.