Nazi Chemical Giant Declares Bankruptcy

The timing was ironic.

On Sunday, Germany mourned the 65th anniversary of the Kristallnacht Nazi pogroms. On Monday, I.G. Farben, which manufactured the gas that killed Nazi concentration camp prisoners, was declared insolvent, more than 50 years after the liquidators started to dissolve the firm.

"There's no serious basis for continuing the liquidation," chief liquidators Otto Bernhardt and Volker Pollehn said on Monday, after saying that they would register IG Farben's insolvency the same day.

The two said financial problems on the part of investor WCM, an investment and real estate firm that had agreed to buy IG Farben's real estate holdings, led to the eventual bankruptcy.

IG Farben's assets currently make up from €5-€10 million.

Angry protesters

The press conference in Frankfurt was accompanied by angry protesters. Demonstrators criticized the fact that former forced laborers will have no more recourse to compensation.

Although Bernhardt and Pollehn established a foundation in 1999 to compensate them, it is only endowed with 500,000 Deutschmarks (around €256,000 or $293,000). More money was supposed to be paid into the foundation eventually, but IG Farben's insolvency will prevent that. All remaining assets are expected to go to the firm's creditor banks, and the liquidators said it was unclear whether former forced laborers would receive compensation.

Forced laborers from western countries received compensation for their trials at IG Farben plants in the 1950s, but many of those from Eastern Europe are still waiting. IG Farben was not involved in the fund established by Germany in 2001 to compensate forced laborers.

Both Bernhardt and Pollehn and the Association of Critical Shareholders in Germany have speculated that the lively trading in IG Farben shares on Wednesday -- just hours before the company announced possibly declaring insolvency -- suggested insider trading. The liquidators said they had not passed on information before the Wednesday statement.

Besides Bernhardt and Pollehn, only IG Farben's supervisory board and the creditor banks were already aware of the situation, they said.

"We believe the creditor banks should waive their claim to the money," Henry Mathews, head of the Association of Critical Shareholders, told Deutsche Welle. "It is blood money that belongs to the former forced laborers not financial speculators. The moral claims are undeniable."

Intertwined with Hitler's regime

IG Farben was founded in 1925. Even before the rise of the Nazis in 1933, the firm, then the world's largest chemical manufacturer, was closely-affiliated with the National Socialists. It produced Zyklon B, the gas that was used to kill prisoners in concentration camps, and exploited more than 80,000 forced laborers in labor and concentration camps.

After World War II, the Allies stripped the firm of most of its assets, which were transferred to the three chemical firms Bayer, Hoechst (now Aventis) and BASF. Since then IG Farben's legal successor has been in the process of being liquidated, while its stocks continue to be traded.