GPG Cash Investors Update


We have been asked by certain investors to consider claims for compensation relating to investments sold by a German company, Dolphin Capital 80. Project GmBH & Co. KG (“Dolphin”). The investments were fixed rate secured loan notes issued in several series between at least 2014 to 2015.

Dolphin sold fixed rate Loan notes with the intention of using the capital raised to purchase and develop property in Germany. Each investment would have its own Loan Note and be secured by a first legal charge over the property.

The Loan Notes were to be non-transferable with the investors generally holding them to maturity, being a period of 2 or 5 years. The interest rates to be paid under the Loan Notes were between 10 - 13.8%.

Dolphin has defaulted on its payment obligations and insolvency proceedings are now underway in Germany. It is unclear what, if any, realisations will be made within the insolvency or what the outcome will be for Loan Note creditors.

We have been asked to consider claims against a variety of parties. Our investigations have identified a complex structure with many investors based in the UK as well as other jurisdictions, assets based in Germany and contracts which are subject to English law.

This raises jurisdictional issues over the appropriate venue for claims and which law applies, notwithstanding the jurisdictional clauses in the contracts. We suggest that investors register with the formal insolvency process in Germany as creditors

Details of potential claims have been provided in this document. While no two cases are ever the same there is a pattern amongst certain groups of purchasers and the general principles over these cases are very similar and have been dealt with as such.

The Process:

Following consultation with our legal team and the release of the judgment in the matter of London Capital and Finance (Various claimants vs. FSCS), we are now in a better position to update Dolphin investors on the claims we are prepared to take forward and those that we will be putting on hold.

It is important to note that we are unable to assist everyone. We are bound by certain factors which limit both our jurisdictional reach, the probability of success and the recoverability of any award that is made.

The initial investigation seeks to ascertain ascertaining whether:

  • The act or omission gives rise to an actionable breach under the relevant laws, regulations, or scheme rules to allow a claim for damages.


  • It can be evidenced that the defendant(s) were responsible for the act or omission.


  • That the defendant(s) have sufficient liquidity to meet any liability that arise from claims.

If a claim meets the threshold set out above, we will then determine whether claims can be litigated or whether the option exists to pursue them through one of the free to use services such as:

  • Financial Services Compensation Scheme (FSCS)


  • Financial Ombudsman Service (FOS)


  • Pension Ombudsman Service (POS)

In other words, those that require formal legal proceedings and those that do not.

There are a variety of reasons why a claim may need to be pursued using one route over the other. Each claim will be assessed on its own merits and discussed with you before determining which option is selected.

If we deem a claim to have good prospects of success and the defendant of sufficient liquidity to meet any claim, we will offer to act on a strictly no-win no-fee basis. This means if we lose your claim, you do not pay us any fees. If we win, we take a percentage of your damages upon conclusion of the claim.

If we do not believe a claim has good prospects of success or is against a defendant with limited liquidity, we will inform you of such and advise of alternate options available to you or close your file at no cost to yourself. You would be entitled to pursue the claim yourself or seek representation from another party.

If formal legal proceedings are required, there are additional costs that need to be considered. These disbursements include:

  • Court fees


  • Expert witness


  • Legal opinion from a Barrister


  • After The Event (ATE) insurance. (This is to insure you against the costs risks from losing the case)

We would not cover these costs; you would be responsible for paying them. If you are not able to do so or do not want to pay them, then we can look to source litigation funding for you to cover these costs. 

Litigation funders are widely available but would charge a percentage of your damages in return in addition to their capital back. In most cases they would only be prepared to fund a claim where legal opinion had been obtained showing prospects of success of 60% or more.

The choice will always be yours as to whether we issue formal court proceedings, and the options will be discussed with you in detail before any action is taken.

There is a huge amount of activity in the courts and through regulatory claims that may in the short, medium, or long term affect positively, the viability of claims and litigation. We constantly review options and even in the relatively short time we have been investigating the Dolphin Trust more options have become available.




Investment Methods

Investors that used cash payments to invest in the project did so in one or three ways:

  1. Direct into Dolphin, with no advisor or introducer

  2. Using an Unregulated introducer or no regulated financial adviser

  3. Using a Regulated Financial Adviser


Direct into Dolphin, with no advisor or introducer

A breach of contract occurs when one party to the agreement fails to fulfil an obligation or breaks the ‘Terms and Conditions’ as set out in that agreement.

Although we are confident it would be relatively straightforward to prove Dolphin breached the terms of the contract, there is considerable doubt as to whether Dolphin would be able to meet any liability that arose out of the claim.

With insolvency proceedings already underway, any claim of this nature may well conflict with any action being taken by the administrator.

Using an Unregulated introducer or no regulated financial adviser

Although investors may not have been aware of the Regulated and Authorised status of the introducer or advisor that status can be crucial as to whether it is possible to claim against them through FOS or the FSCS.

Section.21 of the Financial Services and Markets Act 2000 (FSMA) prohibits unauthorised persons from engaging in financial promotion (which we think would apply to the introducers to Dolphin). However, there is conflicting caselaw on whether the introducer can be held liable and pursued for such a breach.


It is our view that most of these cases will either fall outside judgements seen in recent similar cases (FCA v Avacade Ltd) or will be complicated by whether the defendant introducers are solvent and have sufficient liquidity to meet any liability that arose from those claims.

Given the increased risk in securing any damages post judgment, these cases would need to be self-funded. Where we feel an introducer may have sufficient liquidity to meet claims, we will write to those investors concerned to outline what options are available.

Using a Regulated Financial Adviser

We have been looking at the advice and/or recommendations given by regulated advisors concerning the Loan Notes and whether that advice gave rise to an actionable breach of the relevant regulations.

The main issues to consider are whether there are reasonable prospects of success for claims on the basis that the Loan Notes were Designated Investments within the meaning of Article 77 of the Financial Services and Markets Act (Regulated Activities) Order 2001 (“RAO”). Given the way Dolphin structured and operated the scheme, there is some contention over whether the Loan Notes could be considered as Loan Stock or Debenture Stock.

We have also been investigating whether the scheme could be considered an Unregulated Collective Investment Scheme (UCIS). If the scheme were to be considered a UCIS then it would fall under the scope of the FSCS if advised on by regulated parties.

Following the recent High Court decision in relation to London Capital and Finance (Various claimants vs. FSCS), we believe that the prospects of success are low.

We are also aware of other firms pursuing similar claims with the FSCS and are awaiting the outcome of those before proceeding.

Claims or action actions 3rd Parties

As part of our investigation, we have looked at potential action against third parties involved in the receipt, transfer and destination of monies transferred into the scheme.

For legal reasons we cannot name the companies in question, but those of you affected will recognised the area of concern.

We are considering a claim in the tort of conversion in relation to misapplied cheque payments, or alternatively engaging the provisions in the Bills of Exchange Act 1882 as cheques made payable to one company were deposited in a differently named account. 

One issue here is that those making payments that ended up in the correct account were contractually liable to make those payments and the bank can argue that even if there is a technical breach they have complied with instructions and funds have been applied correctly.

We have now selected a test case which we will undertake a final review before seeking to instruct Counsel to provide advice on. If Counsel are unwilling to do so on a Conditional Fee basis (no-win-no-fee), then this will need to be funded collectively by those claimants who it directly affects.

If you fall into this group, we will write to you individually to talk you through the next steps and confirm whether you wish to take part.

Although there were areas of concern centred around the actions of other companies involved in the transfer and receipt of monies, we have found that regardless of some perceived ‘grey areas’ of activity, payments reached the intended destination and the relevant loan notes were issued to the investors concerned. Therefore, we cannot see what duty was owed or breached in these circumstances.


Matters relating to Dolphin are complex and varied. There are many investors all with their own circumstances to consider.

Investment into Dolphin was facilitated in many ways, leading to a wide variety of possible causes of action and Defendants, in different jurisdictions.

We have considered those detailed in this update at length and although we cannot assist everyone, we have been able to increase the options available to investors since first being contacted by the GPG Creditors Association.

Some of you will understand be disappointed with this outcome but some matters are simply outside of our powers or jurisdiction. We would urge you to continue your campaigning and to work together as a collective.

It does have an impact, one which can be seen in the case of London Capital and Finance, where like with Dolphin, many investors fall outside of the scope for negligence claims. As a result of several years of collaborative campaigning the government have said they are setting up a compensation scheme for victims of London Capital and Finance that falls outside the scope of claims submitted to the FOS or FSCS.

We wish you the best of luck.