The Perfect Crime Against A Perfect Trustee: The Unsolved Murder Of Detlev Rohwedder

In the evening hours of April 1, 1991, on what otherwise may have been a relatively unassuming day in Düsseldorf, Germany, Detlev Karsten Rohwedder was murdered at his home, in cold blood. The case remains unsolved and arguably ranks as Germany's own version of the JFK assassination – a prominent member of the government establishment gone far too soon with seemingly no one to hold accountable.

While Succession has been a recent popular choice for binge-watching a streaming TV series, I would encourage you to consider screening Rohwedder: Einigkeit und Mord und Freiheit (English title: A Perfect Crime), a 4-episode docuseries released on Netflix in 2020, which explores the true events surrounding the reunification of Germany through the lens of the story of Detlev Rohwedder, the man tasked with overseeing the economic overhaul and integration of East German industry into the capitalist West.

Detlev Rohwedder was head of what was known as the "Treuhandanstalt" (the "Trust Agency"), colloquially referred to as the "Treuhand" (the "Trust"), a government agency established to privatize approximately 15,000 state-run companies of the former German Democratic Republic (the "GDR"). These included shipyards, steel foundries, textile plants, and more, all of which required major corporate restructuring from the perspective of Western standards.

To frame the Trust in trust language, it might be said to have been settled by the former GDR, on consideration of the transfer of all state-held corporate interests, to be held and managed by the Trust Agency as trustee for the benefit of the Trust's beneficiaries, the reunified German population. This is, of course, a simplification of the reality a reunified German government faced. The Trust Agency was, in fact, described as the largest holding company the world had ever seen.

According to Michael Hoffman-Becking, a prominent German business lawyer with actual knowledge of the circumstances, it was a "huge task, probably without precedent, that one institution – the Treuhand – should integrate all these companies, restructure, liquidate, [and] sell them."

Who better to oversee such a Herculean task than the man who had engaged in the prominent restructuring of one of Germany's most significant corporations of the time – Hoesch AG – for which he was recognized as Manager of the Year in 1983? By letting two-thirds of the company's workforce go and thus returning the company to profitability, Detlev Rohwedder, then-CEO of Hoesch AG, proved himself capable of making difficult decisions.

In the language of the Trustee Act, RSO 1990, c T-23 (the "Act"), at subsection 27(1), in Ontario we might say that Detlev Rohwedder exercised "the care, skill, diligence and judgment that a prudent investor would exercise in making investments." This provision is guided by subsection 27(5) of the Act, which sets out the criteria a trustee must consider in "planning the investment of trust property":

1. General economic conditions.
2. The possible effect of inflation or deflation.
3. The expected tax consequences of investment decisions or strategies.
4. The role that each investment or course of action plays within the overall trust portfolio.
5. The expected total return from income and the appreciation of capital.
6. Needs for liquidity, regularity of income and preservation or appreciation of capital.
7. An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.

To be sure, Detlev Rohwedder was guided by principles of this nature in leading the Trust Agency's oversight of the former GDR's assets. The poor economic conditions of the GDR, which was said to have been only a few years from collapse at the time, dictated that a corporate wind-up was the prudent course of action in many cases.

Bearing in mind that Detlev Rohwedder entered into his role as head of the Trust Agency following a number of high-profile assassinations, including those of Heinz-Herbert Karry, Karl Heinz Beckurts, and Alfred Herrhausen, he knew from the outset that his new job was high-risk. In an environment where the entire East German population had been accustomed to universal housing and employment, to lay off well in excess of one million of these hard-working individuals was bound to make Detlev Rohwedder the most hated West German in the East.

What motivates a person to undertake such risk? In Detlev Rohwedder's own words, though he was initially hesitant to take on the job:

"Reunification has always been close to my heart and that is why, despite all the criticism and complaints about my work, I am proud to be able to do this job. That's what allows me to rise above all the difficulties I face here."

On at least one occasion, Detlev Rohwedder sought to resign from his role, but he stayed on out of a sense of duty when beseeched to continue by both Chancellor Helmut Kohl and Minister of Finance Theodor Waigel.

Trustees in Ontario are beholden to a number of duties, including the following:

1. A duty to obey the trust instrument (see sections 67 and 68 of the Act);
2. A duty to act impartially (this is a common law duty known as the "even hand" rule); and,
3. A duty to act in the beneficiaries' best interests (see paragraph 27.1(2)(b) of the Act).

Again, it can be said that Detlev Rohwedder conducted himself in accordance with duties of this nature. His conduct on behalf of the Trust Agency serves as a stark reminder, however, that a trustee's duties are never to be taken lightly, even when the resultant decisions are unpopular.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.