The case has caused a stir in Frankfurt's private debt scene. At the end of 2023, the entire corporate private debt team of asset manager H&A Global Investment Management (Hagim), led by Richard Kuckelkorn, was abruptly dismissed. The way the asset manager, part of the insurance group Frankfurter Leben, handled the situation surprised many in the industry and raised questions. What prompted this uncompromising action? And can an asset manager simply terminate an entire team?

The incident recalls the „Lehman Brothers moments“ of the financial crisis, when suddenly dismissed employees had one hour under security supervision to pack their personal belongings into a box, before being escorted out the door. Since then, speculation has been rampant about the exact reasons behind the unexpected dismissals. Rumours are circulating about mysterious real estate deals that may have gone wrong.

So far, the team has remained silent on the incident. Moreover, they have not yet joined another credit fund or bank. The reason is simple – for about a year, the dismissed employees were engaged in a fierce legal battle against their former employer at the Frankfurt Labour Court. It is a tough fight, with hardened positions, and a court that repeatedly delayed the process through postponed hearings – though ultimately, its ruling clearly sided with the private debt team.

The chronology of events underlying the court's decision reads like a thriller. The drama began on December 19, 2023. Shortly before Christmas, Hagim terminated the entire private debt team for operational reasons, citing the discontinuation of new business in the new year. About a month later, the asset manager dismissed Kuckelkorn a second time, in a letter dated January 24, 2024 – this time with immediate effect and for cause. The allegation was that Kuckelkorn had allegedly accessed confidential documents without authorisation, a claim he denies. According to the court, Hagim has yet to provide any evidence for this accusation.

During a search of the private debt office on January 9, 2024, Hagim’s managing director and an employee claimed to have found two documents that Kuckelkorn was allegedly not allowed to possess. As per court records, these documents consisted of a photocopy of an A4 sheet containing the managing director's handwritten notes on structuring, and a copy of an internal cash flow model for evaluating a loan for a construction project in Munich.

Details of the project were not included in the court’s ruling. However, during the public hearing on December 11, 2024, at the Frankfurt Labour Court, a real estate project on „Kastenbauerstraße“ was mentioned. The site houses an office complex, „K2“, built in 1993, which was sold in 2021 by the real estate fund „Leading Cities Invest“ to the Austrian developer Imfarr after the property no longer met sustainability standards. In July 2024, Imfarr filed for insolvency – one of many developers hit hard by the abrupt interest rate hikes in the summer of 2022 and the sharp rise in construction costs.

It is not disputed that Kuckelkorn possessed the two documents. The key issue in court was how he obtained them. Hagim claims he accessed trade secrets unlawfully. Kuckelkorn vehemently denies this, testifying in detail that he received the documents at the end of a conversation with his boss on November 3, 2023 – just weeks before the dismissals – regarding a potential rescue loan for the Munich project.

This raises the question: Why was Hagim’s managing director discussing a real estate loan with Kuckelkorn at all? After all, Kuckelkorn was not responsible for the real estate credit fund, but for the corporate private debt strategy, which, according to Hagim’s website, focuses on „classic direct lending“ – namely, senior and subordinated loans to private companies. Hagim has a separate strategy for real estate loans.

Kuckelkorn stated that he had made it clear in the conversation that he considered the „viability of such a commitment highly questionable.“ His strong opposition to the rescue loan allegedly irritated his boss, who became „noticeably frustrated and annoyed“ before leaving the room. The disputed documents were left in the meeting room, and Kuckelkorn took them, interpreting the discussion as permission to review the details for a deeper analysis, as per court records.

Hagim disputes this account, claiming the November 3 conversation was about a different project unrelated to the Munich deal referenced in the disputed documents. The court found both narratives „plausibly possible.“ However, while Kuckelkorn provided a detailed account, Hagim failed to substantiate its version with evidence.

The court also questioned Hagim’s assertion that Kuckelkorn had a reason to take the documents. „It seems far-fetched that the plaintiff [Kuckelkorn] would expose himself to such a […] risk to his employment for documents that held no obvious personal value to him“, the ruling stated, casting doubt on the alleged motive. Therefore, the issued termination based on suspicion already lacks a compelling suspicion. In its ruling, the court therefore declares that the extraordinary termination is invalid.

Moreover, the court overturned the operational dismissals of the entire team. It did not challenge Hagim’s business decision to discontinue new lending. But it had to assess whether there was genuinely no role left for the private debt team at the time of termination, as Hagim claimed. While new lending had ceased, a legacy portfolio still required management.

Hagim argued that the remaining two members of the credit risk management team could handle the workload. With new business discontinued, they supposedly had 40 additional hours per week available. According to Hagim, Kuckelkorn’s team had spent around 32 hours weekly managing the existing investments.

The private debt team disagreed, asserting that they had averaged more than 50 hours per week, with only 20% of that devoted to new business. The remaining 80% was spent managing and monitoring existing investments. The court ruled in favour of the private debt team, finding that Hagim „failed to provide sufficient detail“ in its justification. The asset manager had aggregated the team's total work hours but failed to break them down per employee, making it impossible for the court to assess whether the workload had indeed disappeared for each individual.

The court also expressed doubts about whether Hagim had genuinely implemented the organisational changes it claimed justified the layoffs. The ruling noted that investment capital had been provided for two projects immediately before and after the operational dismissals, further undermining Hagim’s claims. The court concluded that the company had not convincingly demonstrated a pressing operational need for the layoffs.

So, what happens next? According to the ruling, Hagim must reinstate the private debt team in their previous roles until the dismissal protection lawsuit reaches a final verdict, pay them their 2023 bonuses, and issue an interim employment certificate. If Hagim fails to comply, the team could seek enforcement of the ruling and request court-imposed penalties.

Whether Hagim has reinstated the team or if the dismissed employees have applied for enforcement is currently unclear. The court declined to comment when asked. The private debt team’s lawyers refused to provide a statement, and Kuckelkorn also chose not to comment.

Hagim’s lawyers issued only a brief statement, saying that the firm had ceased new business in the private debt division as of January 1, 2024. „Against this background, Hagim has appealed the labour court’s ruling in favor of the plaintiffs,“ the statement read. Beyond that, no further information was provided.

The trial therefore continues. Due to the appeal, it could drag on for another year before reaching the Higher Labour Court in Frankfurt in the second instance. Given the legal mudslinging, it seems more than unlikely that both parties will still reach an amicable settlement.

Yet, there were allegedly ways to resolve the matter out of court and discreetly. At one point, a private equity investor from Munich reportedly showed interest in acquiring Hagim's existing portfolio. However, no deal has been reached so far.

During the court hearing shortly before Christmas, Hagim’s lawyers admitted that there had been discussions, but they did not see themselves in a position to develop a business model with the plaintiff. Ultimately, the offer was not economically attractive and was rejected by the insurer.

A ruling may have been issued in this complex case, but the final word has certainly not been spoken.