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Märklin fallout: Former owner awarded $18.7 million in judgment against consultant

Published: December 7, 2011

A German court has awarded the former owners of model railroad manufacturer Märklin 14 million euros ($18.7 million) in damages from a company that consulted on the deal to buy the then-nearly-bankrupt firm.


After two years of litigation, the court declared Alix Partners, the consulting firm that had advised Kingsbridge Capital during the purchase, had not done its due diligence in the deal, according to German media sources.


Kingsbridge had originally sought 30 million euros in damages.


Märklin teetered on the edge of bankruptcy in 2006 before being purchased by the Kingsbridge Capital investment firm. After reporting a consolidated loss of 21 million euros, in 2009 the train manufacturer declared bankruptcy.


According to the Federal Association of German Management Consultants (BDU), this is the first-ever ruling of its kind in Germany made against a management consulting firm.


Märklin, which also owns the LGB brand, continues to operate under trusteeship and will not see any funds from the ruling.

 

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