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Fan bonds: no deferral for Kaiserslautern

S.The aforementioned fan bonds are often a high-risk business. The money can be gone quickly if the sporting success does not occur. A current warning example is 1. FC Kaiserslautern, which is in the relegation battle of the 3rd division. The association filed for bankruptcy in June, as this newspaper reported. The FCK’s creditors now also include numerous fans in the insolvency proceedings who signed a fan bond for around three million euros in 2019. The motto at the time was “Your support for the future of FCK”. 5 percent interest per year was promised. Exactly how things will go on with the creditors is not yet clear.

Now the club has asked for the interest to be deferred this year and next. Approval should be obtained at a creditors’ meeting without attendance. Board member Tobias Frey describes the work process in this procedure: “The procedure, which is based on the provisions of the Debt Securities Act, was time-consuming and complicated from the start.” “In particular, we received a large number of queries by email and telephone,” says Frey.

For an effective resolution at least 50 percent of the capital would have had to participate. However, only 39.25 percent took part. Therefore, there is no deferral of interest. The participating bond subscribers approved the interest deferral with 94.31 percent of the votes. “1. FC Kaiserslautern e.V. can only thank these bond subscribers for their support, understanding and encouragement that they have shown. The communication with the draftsmen was – without exception – positive, ”said Wolfgang Erfurt, the chairman of the board of the FCK, trying to find something positive in the vote. The interest due should now be paid out immediately.

Football clubs can borrow money in a similar way to corporations. But the club bonds should only buy or subscribe to followers who have enough money to cope with a total loss. Clubs borrow money from their fans because banks are often no longer willing to do so on similar terms. Many fans do not purchase the bonds as a financial investment, but rather because they are attached to the association or even to support it, says Jürgen Kurz from the German Association for the Protection of Securities (DSW). “Anyone who wants to support their club financially and – in the worst-case scenario – can live with the fact that the money is not paid back can of course buy a fan bond without hesitation,” says Kurz.

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