Circular letter - Schultze & Braun

Insolvency proceedings: PHOENIX Kapitaldienste GmbH, Vilbeler Strasse 29, 60313 Frankfurt /
Main
Here:
Delivery of the insolvency order and invitation to file a claim
Dear Ladies and Gentlemen,
We are hereby informing you that on July 1 st 2005 the Local Court Frankfurt / Main - Insolvency Court - is
now opening the insolvency proceedings and that the undersigned has been appointed as the insolvency
administrator.
1. Delivery of the insolvency order
An official copy of the insolvency order is enclosed as an appendix. The insolvency court has instructed us to
deliver the insolvency order to you. Delivery is made with this letter.
We draw your attention expressly to the content of the enclosed insolvency order as well as to the leaflet for
the insolvency creditors.
2. Report meeting
The report meeting, or respectively, the creditors' assembly, has been set on Wednesday, October 5 th , 2005,
at 10.30 a.m. At the report meeting, the undersigned will report on the proceedings, the measures taken and
possible satisfaction prospects. The creditors will be given the opportunity to come to a decision on a range
of questions (among others the make-up of the final creditors' committee). The report meeting will take place
in the "Harmonie" hall in the Congress Centre of the Messe Frankfurt, Ludwig-Erhard-Anlage 1, 60327
Frankfurt. You will find directions on how to get there on the homepage of Messe Frankfurt at
www.messefrankfurt.com. If you would like to attend the report meeting, please make a note of this
correspondingly on the form for filing claims. This advance registration is absolutely necessary to make
sure there is enough room for all creditors present. Due to the large number of expected participants, entry
will be permitted already from 9.00 a.m. onwards. As participation in the report meeting is not public, your
creditor position will be verified on entry. So please have this letter and your identity papers available to
verify your identity. In the case of participation of a representative / authorized agent, the power of
representation is to be proven in a suitable manner (current excerpt from the commercial register, original
power of attorney etc.).
3. Verification meeting / filing of claims and claim verification
The verification meeting will take place on November 24 th , 10.00 a.m., on the premises of the Insolvency
Court Frankfurt. It is not necessary for you to attend the verification meeting. You can obtain information on
the proceedings at any time via the Internet and can also look up your filed claims (refer to under item 4).
Please file your insolvency claim by
September 15 th 2005
with the insolvency administrator for the insolvency schedule.
To file your claim we are providing you with a form and the leaflet for insolvency creditors. As an exception,
please return your form for filing claims and the copies of the receipts to be enclosed not in duplicate. We
would again like to expressly draw the attention of foreign creditors to the fact that claims can only be made
in EUROs, and that the language of the court is German. This is why the registration form is issued in
German. However, to enable you to understand the contents of the form for filing claims, we have prepared a
sample registration for you in English on our homepage www.schubra.de.
To allow efficient processing of the forms for filing claims considering the large number of creditors
involved, in the enclosed form we have already entered a claimed amount for the claims of the investors. This
amount has been taken from the balance identified by the debtor on the bank statement dated February 28 th
2005. For accounts run in US Dollars, the balance was calculated at the exchange rate on the day (appointed
date opening of proceedings July 1 st 2005, bank selling rate 11.00 a.m.). Interest and expenses have not been

taken into account here, as this would only have an immaterial impact on the economic results for the
individual investor. However, we would expressly like to draw your attention to the fact that this does not
constitute any acknowledgement of the amount claimed. From the insolvency administrator's point of view,
the investors in the PHOENIX Managed Account have no entitlement pertaining to the apparent profit
identified in the bank statements. On the contrary, the claims are to be adjusted to reflect the amount actually
paid into the PHOENIX Managed Account by the investors (minus any repayments which may have been
made). Currently investigations are underway as to whether these amounts are to be increased by the
foregone investment interest (so-called negative interest) or whether the profits / losses made to a small
extent through actual trade are to be taken into consideration. As not only the legal appraisal but also the
calculation of amounts will take quite some time yet, the claims of investors in the PHOENIX Managed
Account are not expected to be reviewed and included in the first verification meeting set by the insolvency
court. The insolvency court will adjourn the verification meeting. We therefore urge you not to contact either
the insolvency court or the insolvency administrator to ask about the results of the claims verification after
the verification meeting. The creditors will automatically be informed of the results once their claims have
been verified. In the case at issue, it has been possible to reach an agreement with the insolvency court that
this information will not only be sent to the creditors of disputed claims, but that all creditors will receive
appropriate excerpts of the schedule. Should you want to reassure yourself that your claims has been included
in the insolvency schedule, then after the verification meeting you will have the opportunity to view the
insolvency schedule via our homepage www.schubra.de. You will find details on the creditor information
system below (item 4).
As the legal position has today not yet been conclusively clarified as to the amount for which the creditors of
the PHOENIX Managed Account can assert claims within the framework of the insolvency proceedings, the
intention is to have this legal question clarified in so-called test cases. In this respect the undersigned will
contact lawyers of investors to identify suitable cases and to clarify the details of these test cases. We
presume that this will allow the unclear legal position to be clarified economically and sensibly for these
proceedings. The undersigned will also recognise the result from these test cases for filed claims in which the
situation is comparable, meaning that only once the test cases have been completed will it be possible to
verify the insolvency claims. Although this can take several years, you will not be at any economic
disadvantage, as the distribution of advance payments is not possible anyway before this legal position has
been clarified.
If you agree with this process, then we ask you to sign and return the form for filing claims to us unchanged.
In this case we are able to automatically include the data filed in the insolvency schedule. However, we do
ask you to check the creditor-related data on the form (name, address, banking connection) and to make any
necessary hand-written corrections or amendments in the amendment fields provided.
If you want to file another amount other than the suggested receivable amount, you can also register this by
hand on the form in the amendment fields. In this case, please note the following:
The filed receivable amount is to be given in EUROs.
Please substantiate your claim in the case of an amendment to the printed amount by providing copies of
invoices, contracts, payment receipts etc.
If you are asserting interest, this may only be charged up to the day of insolvency proceedings being opened.
A calculation is to be enclosed, showing interest rate, interest time period and amount of interest.
Interest as of the day of opening insolvency proceedings as well as costs you incur by participating in the
insolvency proceedings (for example travel to the creditors' meeting) can not be filed, as the interest after
opening proceedings only represents a low priority insolvency claim which the court has not requested to
be filed.
Please also note:
Only signed forms for filing claims are effective.
Any existing judgements or enforceable default summons are to be enclosed as originals.
In the case of filing by a representative (e.g. lawyer) a special power of attorney related to the insolvency
proceedings is to be enclosed, the costs of filing may not be taken into account as part of the insolvency
claim.
We can not take in accounts filing of claims which were already submitted before the proceedings were
opened. So please submit your file again.
Due to the large number of claims being filed, I can not provide any acknowledgement of receipt.

Claims for release from the insolvent estate or preferential claims of secured creditors (retention of title and
rights of lien, rights from claim assignments etc.) as well as setoff rights are to be asserted within the
registration period in a separate letter.
If the printed amounts are not changed, then please do not under any circumstances submit any further
documentation or enclosures with the form for filing claims.
To be able to review other claims (i.e. other claims apart from the Managed Account), we kindly ask you to
provide copies of appropriate evidence for the filed claims as well as the
original titles for execution of a legally enforceable claim if applicable.
4. Information on the current state of affairs via the Internet
You will find general information for creditors and on the state of affairs on our homepage www.schubra.de,
it will be regularly updated.
Furthermore, after the report meeting, you will be able to view the written report on the insolvency
proceedings via our homepage www.schubra.de. You will also find bulletins on the insolvency proceedings
here. The PIN number which you will need to access this is: .
In the same place, the reports on the current state of affairs to be prepared by the undersigned during the
course of the proceedings will be published.
In this way, several days after the report meeting, it will be possible for you to enquire whether your filed
claim has been included in the insolvency schedule.
5. Other important information
In the interest of correct and proper procedure, we kindly request that you do not make any inquiries by
telephone. Please appreciate that we will no longer answer inquiries on the situation in view of the
information made available to you via the Internet. Now you will already find more detailed information for
creditors on the homepage in which we answer the frequently asked questions on the proceedings at issue;
this information is updated at regular intervals. Apart from that, it is not possible to answer individual
questions. This not least because the insolvency administrator is not allowed to advise individual creditors
and also the time it would take can not be justified with the large number of creditors. So please, if possible,
also refrain from making inquiries by telephone or in writing to the insolvency court.
Yours sincerely,
Schultze & Braun
Rechtsanwaltsgesellschaft
für Insolvenzverwaltung mbH
Frank Schmitt
Attorney – Specialist Attorney for Insolvency Law
as Insolvency Administrator