Why Germans from Kilkenny and Carlow are going bankrupt
When the German brothers Alexander and Constantin von Bienenstamm were overcome by money worries, Ireland became the beacon of hope for their financial salvation.
Reland’s outdated bankruptcy laws were revised in 2015, reducing the typical length of the process from three years to one year, while also having the added appeal of allowing EU citizens to quietly escape the glare of the public home to go bankrupt.
In 2005, the Bienenstamm siblings from Frankfurt founded a restaurant chain called Cuisine of Asia.
By 2015, it was thriving with 17 outlets serving hundreds of hungry diners every day. That year, the brothers sold a majority stake in the company to an investor and largely withdrew from the chain, which filed for bankruptcy in October 2019.
The von Bienenstamms, meanwhile, had branched out into another business. At the beginning of 2019, they founded the Papa Napoli pizza branch in Frankfurt.
But then Covid came along and pounded the food service sector.
The brothers contacted the law firm Kanzlei Rieger & Partners to discuss their options.
In mid-August 2020, as the pandemic raged, Pascal Verbracken of law firm Rieger & Partners founded an Irish company – initially with an apartment in central Dublin – called Alecon with an affiliated unit of the firm. The address was later moved to Tullow Street in Carlow Town – a hub which is home to up to 30 companies registered by firms affiliated with Rieger & Partners.
Firm Rieger & Partners uses two firms controlled by their clients – DPCE Consulting Europe Ltd in Cyprus and VR Bookkeeping Ltd in Ireland – to legally incorporate firms in Ireland for clients.
On the same day that Alecon was founded by DPCE, the two von Bienenstamm brothers were appointed managing directors of the company. The home address given for both of them is the Ullard Holiday Homes in Co Kilkenny – which dozens of Germans who are clients of the German law firm give as their home address.
Last November the brothers – who until then appeared to be living in two Dublin flats above a small cluster of outlets which includes a government-funded local employment agency – were declared bankrupt in Ireland.
In March of this year, filings with the Companies Registration Office (CRO) submitted by the Rieger law firm show that the brothers have resigned as directors of Alecon. On the same day, Sandra von Bienenstamm was appointed director, her address being Ullard Holiday Homes. According to German company documents, she is also involved in Papa Napoli’s business in Frankfurt.
Irish bankruptcy itself is also very, very debtor friendly
A German who went bankrupt in Ireland in 2021 spoke to the Irish Independent earlier this year. He described how bankruptcy in Germany can turn someone into an outcast.
“You’ve been stigmatized your whole life,” he said. “It’s like being a murderer.”
Cornelius Rieger and Pascal Verracken of law firm Rieger & Partners – who describe themselves as insolvency specialists – insist that not all of their clients who are directors of companies in Ireland are here to go bankrupt or seek other insolvency solutions .
Speaking of Irish Independent This week, Mr Rieger – who has refused to confirm the names of clients or how many the firm has assisted – claimed that many of them come to Ireland to set up businesses here and form limited companies, which have advantages over the standard -GmbH business vehicle which is used in Germany.
“Ireland is the first country they trust,” he said of why Germans are choosing to choose Ireland either for bankruptcy or for starting a business.
“You know it from the ads. When you think of Ireland you think of good TV shows, you think of good meat, good butter. And when your country has good food, you get a lot of trust.
“Irish bankruptcy itself is also very, very debtor-friendly,” notes Mr. Rieger in a video posted on YouTube last year, for which the online platform provides a translation. He points out that bankruptcy in Ireland involves debt that has legal claims attached to it.
“That means criminal claims… or tax evasion or other criminal offences,” he says, describing Ireland as “absolute number one” in the EU for bankruptcies.
“You are really taken by the hand,” he adds, “in Ireland you can achieve the so-called second chance.”
Asked how dozens of German directors all appear to live at one address in a small holiday home complex in Co Kilkenny, Mr Rieger said clients there typically stay for a few weeks in a six- or seven-bed shared flat before moving on to other places.
“We only use this apartment for our customers’ first attempts at walking,” he says, and that they will move into their own apartment “after a few weeks”.
“We don’t overload it,” he says.
A local source in Co Kilkenny said they met Germans who actually live in the complex. However, it is understood that the development only includes 16 individual units.
Formerly owned by the late billionaire developer Liam Carroll, he once planned to build a large hotel and conference center on the site. Later controlled by Nama, it was sold to a local businessman in a BidX auction in 2018, it says.
“Clients are calling us wanting to start a business in Ireland, want to live in Ireland and you know how difficult it is to find housing [in Ireland] from Germany,” adds Mr. Rieger.
But months later, and in some cases years later, most Irish firms set up by units of the German law firm still list directors residing in the Ullard Holiday Homes complex.
Mr. Rieger asserted that this is often due to the fact that the change of address only takes place when an annual declaration is submitted to the commercial register office.
“We don’t do this for our customers,” said Mr. Rieger. “We help them set up, we help with PPS
[Personal Public Service Number].”
He says it is the law firm’s professional partners in Ireland who do the change of address and other administrative tasks.
However, a director’s change of residential address may be notified at any time without waiting for the filing of an annual declaration and a change of residential address must by law be notified to the CRO within 14 days of the change of address.
Company records also show numerous instances where changes in directors or changes in director details were communicated to the CRO by the Rieger & Partner law firms.
Mr Rieger says that Ireland is an attractive place for German nationals to set up a business due to the lower costs and capital requirements as well as the speed of implementation here.
Katharina Ebert is one of the clients whom the law firm recently supported in founding the company. Her company Estella Projects was formed in March in Co Carlow with VR Bookkeeping Services as Secretary and Ms Ebert as Director.
Ms. Ebert is a member of the SPD, which governs there as a coalition partner, and narrowly lost the 2018 election for mayor of the Darmstadt-Dieburg district south of Frankfurt.
Estella Projects gives her residential address in Mühltal in Germany, i.e. in Darmstadt-Dieburg.
Ms. Ebert did not respond to an email and text message from the Irish Independent to ask her why she started the Irish company.
Mr. Rieger declined to confirm if she is a customer.
He said many of the company’s clients who set up businesses in Ireland create jobs here.
“Quite a lot of our clients have employees – quite a lot Irish,” he says. “We have people who are consultants, builders, hairdressers or fashion designers.”
But many of the Irish companies whose clients are directors seem to be showing little activity.
German lawyer and motivational speaker Markus Mingers – well known in his home country – is among those who have flirted with Irish companies.
He was a Director of Irish company Greti It Europe, founded in Carlow Town in 2020 by VR Bookkeeping Services.
His home address was listed as Ullard Holiday Homes and he was the director of Greti It from 2020 until last summer. He received no response to a request sent to him through his website.
While some Germans no doubt use Irish firms to conduct their business legally here and elsewhere, it is certain that many are settling here to seek bankruptcy solutions.
“Most of what we do is to find the land for people where they can grow easily and quickly,” says Mr. Rieger. “Most don’t file for bankruptcy or bankruptcy. Most want to do business. Ireland is just one country to us.”
This article was modified on May 26, 2022
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