Asset Management and Protection

Asset management for charitable foundations is one of the most important aspects of successful foundation work, and at the same time a complex issue. This area is governed by highly specific legal and practical considerations. Except in the case of principal-depleting foundations, the foundation's principal should be maintained permanently, and should generate the highest revenues possible. The revenues, in turn, must be accessible for expenditure from time to time. Only by following this procedure can the foundation finance its long-term goals. The modern portfolio theory requires reasonable diversification and investments even in alternative investment vehicles. It's neither necessary nor advisable to follow a “gilt-edged” investment strategy. Keeping the foundation's assets in a low-interest savings account, for example, is a misuse of the foundation's assets which can endanger its charitable mission and favorable tax status.

WINHELLER Attorneys at Law can help your charitable foundation establish a legally sound, profitable and balanced asset-management strategy that will help your organization achieve its goals. We will be happy to work with your asset managers on these issues. Alternately, we will be happy to direct you to qualified asset manager who will help you implement measures we recommend and who can professionally handle further asset-management tasks.

For those foundations with large stock portfolios (stocks, funds, pension securities), we offer a lucrative and cost-free tool to foster asset management and avoid misuse and waste of foundation assets. We have a close working relationship with the Philadelphia, PA law firm of Kessler, Topaz, Meltzer & Check, LLP, which specializes in investor-rights litigation. In particular, clients who are charitable foundations are advised to make use of these services, in order to prevent asset-misuse with adverse tax consequences and the possible revocation of recognition as a charity.

Many listed companies all over the world have been subject to so-called shareholder class actions in the USA. These lawsuits are class actions filed against companies or managers who fraudulently inflate the value of stocks in their enterprise, before the discovery of the fraud causes a crash in the stock price. Institutional investors, in particular, often suffer considerable losses as a result of this practice. Shareholder class action lawsuits are a proven means for investors to recoup some of the losses caused by this misconduct. By means of cooperation with our colleagues in the US, we can secure participation in these proceedings. Participation is free, since our colleagues, as is common in the USA, work on a contingency-fee basis. That is, the attorneys take, as their fee, a portion of any compensation payments paid by the defendants in a particular lawsuit – but only after the attorneys have won a damages verdict.

In order to protect your portfolio effectively and take advantage of any compensation payouts, we will monitor your foundation's portfolio to see if it can benefit from pending shareholder class action lawsuits in the USA. If a lawsuit pending in an American court affects one of the securities owned by your foundation, we will advise you how to participate in the lawsuit at no cost, so that you will not lose the right to possible compensation payments a court may order later. This service is strongly recommended to all charitable foundations, since the foundation's status as a charity can be endangered if the foundation fails, without adequate reason, to claim compensation payments to which it is entitled.

Your contact persons for all issues related to Private Foundations are Atty. Stefan Winheller and Atty. Anka HakertAndreas Warkentin - German Attorney at Law, LL.M. oec. int., Certified Banking & Capital Markets Law Specialist, Certified Public Manager. Please contact us by e-mail (info@winheller.com) or by phone (+49 69 76 75 77 80).