A law firm is helping German nationals to go through bankruptcy in Ireland, far from the glare of publicity at home
When money woes overwhelmed German brothers Alexander and Constantin von Bienenstamm, Ireland became the beacon of hope for their financial salvation.
Ireland’s antiquated bankruptcy laws were overhauled in 2015, reducing the amount of time the process typically lasts from three years to one, while it also has the additional attraction of enabling EU citizens to quietly go bankrupt out of the glare of publicity back home.
In 2005, the von Bienenstamm siblings from Frankfurt had 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 business to an investor, and largely withdrew from the chain, which filed for bankruptcy in October 2019.
The von Bienenstamms, meanwhile, had branched out with a different business. In early 2019, they founded the Papa Napoli pizza outlet in Frankfurt.
But then Covid came, hammering the food service sector.
The brothers turned to law firm Kanzlei Rieger & Partner to discuss their options.
In the middle of August 2020, as the pandemic raged, Pascal Verbracken of Kanzlei Rieger & Partner used a unit connected to the law firm to establish an Irish company – initially with an address at an apartment in Dublin city centre – called Alecon. Its address was later moved to Tullow Street in Carlow town – a hub at as many as 30 businesses registered by firms connected to Kanzlei Rieger & Partner are based.
Kanzlei Rieger & Partner uses two firms controlled by its principals – DPCE Consulting Europe Ltd in Cyprus and VR Bookkeeping Ltd in Ireland – to legitimately establish firms in Ireland for clients.
On the same day Alecon was founded by DPCE, the two von Bienenstamm brothers were appointed directors of the firm. The residential address for both was given as the Ullard Holiday Homes in Co Kilkenny – which dozens of Germans who are clients of the German law firm list as their home address.
Last November, the brothers – by then apparently living in two flats in Dublin above a small row of outlets that includes a Government-funded local employment services – were adjudicated bankrupt in Ireland.
In March this year, filings at the Companies Registration Office (CRO) presented by Kanzlei Rieger show that the brothers resigned as directors of Alecon. The same day, Sandra von Bienenstamm was appointed a director, with her address given as the Ullard Holiday Homes. She’s also involved in the Papa Napoli business in Frankfurt, according to German company filings.
The Irish bankruptcy itself is also very, very debtor-friendly
One German national who went bankrupt in Ireland in 2021, spoke to the Irish Independent earlier this year. He described how going bankrupt in Germany can make someone a pariah.
“You are stigmatised all your life,” he said. “It’s like being a murderer.”
Cornelius Rieger and Pascal Verbracken of Kanzlei Rieger & Partner – which bills itself as an insolvency specialist – insist that not all their clients who are directors of companies in Ireland are here to go bankrupt or to avail of other insolvency solutions.
Speaking to the Irish Independent this week, Mr Rieger – who declined to confirm the names of any clients or how many the firm has assisted – claimed that many of them are coming to Ireland to establish businesses here and set up limited companies that offer advantages over the standard GmbH business vehicle that is used in Germany.
“Ireland is first, a country, that they trust,” he said of the reason why Germans opt to choose Ireland for either bankruptcy or to set up a business.
“They know it from the commercials. When they think of Ireland, they are thinking of good TV shows, they are thinking of good meat, good butter. And if your country has good food, you get a lot of trust.
“The Irish bankruptcy itself is also very, very debtor-friendly,” notes Mr Rieger in a video posted last year on YouTube, and for which the online platform provides a translation. He points out that bankruptcy in Ireland includes debts connected to legal claims.
“That means claims from a criminal offence… or tax evasion or other criminal offences,” he says, describing Ireland as the “absolute number one” in the EU for bankruptcy.
“You really are taken by the hand,” he adds, “In Ireland, you can achieve the so-called second chance.”
Asked how dozens of German directors are all apparently living at one address at a small holiday home complex in Co Kilkenny, Mr Rieger said that clients typically stay there at a shared apartment, with six or seven beds, for a few weeks before moving on to other locations.
“We are using this apartment only for the first steps for our clients,” he said, and that they move to their own apartment “after a couple of weeks”.
“We don’t overload it,” he says.
A local source in Co Kilkenny said that they have met Germans who do indeed live at the complex. However, it is understood that the development includes just 16 individual units.
Formerly owned by the late billionaire developer Liam Carroll, he had once planned to build a large hotel and conference centre at the site. Later controlled by Nama, it was sold in a BidX auction in 2018 to a local businessman, it is understood.
“The clients are calling us and want to open a company in Ireland, want to live in Ireland, and you know how hard it is to find an apartment [in Ireland] from Germany,” adds Mr Rieger.
But months later, and in some cases years later, most of the Irish firms established by units of the German law firm still list directors living at the Ullard Holiday Homes complex.
Mr Rieger insisted that that’s often because the change of address is only made when an annual return is submitted to the Companies Registration Office.
“We are not doing this for our clients,” said Mr Rieger. “We are helping them set up, we are helping with PPS
[Personal Public Service Number].”
He says it’s the law firm’s professional partners in Ireland that handle changes of address and other administrative functions.
However, a director’s change of residential address can be notified at any time without waiting for an annual return to be submitted and a change of residential address must be notified under law to the CRO within 14 days of the address changing.
Company filings also show numerous instances where changes in directors or changes in director details have been submitted to the CRO by the Kanzlei Rieger & Partner firms.
Mr Rieger says that Ireland is an attractive place for German nationals to establish a company due to the lower cost and capital requirements, as well as how quickly it can be done here.
Among clients the law firm has recently helped to set up a company here is Katharina Ebert. Her firm, Estella Projects, was established in March in Co Carlow, with VR Bookkeeping Services as its secretary and Ms Ebert as a director.
Ms Ebert is a member of the Social Democratic Party in Germany, which rules there as a coalition partner, and in 2018 narrowly lost a bid to be elected Mayor of the Darmstadt-Dieburg district south of Frankfurt.
Estella Projects lists her residential address as being in Muehltal in Germany, which is in Darmstadt-Dieburg.
Ms Ebert did not respond to an email and text message from the Irish Independent to ask her why she had established the Irish company.
Mr Rieger declined to confirm if she is a client.
He said that many of the firm’s clients who set up businesses in Ireland generate employment here.
“Quite a lot of our clients have employees – Irish people, quite a lot,” he says. “We have people who are consultants, builders, hair stylists, or clothes designers.”
But many of the Irish companies of which their clients are directors appear to show 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, which was established in Carlow town by VR Bookkeeping Services in 2020.
His home address was listed as the Ullard Holiday Homes and he was a director of Greti It from 2020 until last summer. No response was received to a query sent to him via his website.
While some Germans are no doubt using Irish firms to legally conduct their business affairs here and elsewhere, it’s certain that many are establishing themselves here with a view to pursuing insolvency solutions.
“Most of what we are doing is to find for people, the country where they can grow easily and fast,” according to Mr Rieger. “Most are not doing bankruptcy or insolvency. Most want to make business. Ireland is just a country for us.”
This article was amended on 26 May 2022