First judgment on Haasenburg claims: the parent company is to be compensated in principle

A German court has issued its first ruling in a long-running legal dispute involving the Haasenburg GmbH, a private company that operated children's homes in Brandenburg before they were shut down in 2013 over concerns about child welfare. The Landgericht Potsdam ruled Friday that the state of Brandenburg is legally obligated to compensate the firm for lost profits, though the exact amount will be determined later in a final verdict. Both sides have the right to appeal the decision. The Haasenburg GmbH ran three children’s homes in Jessern, Müncheberg, and Neuendorf am See with up to 114 beds. They were closed in late 2013 after the Brandenburg Ministry of Education, Youth and Sports concluded that the facilities failed to adequately protect children’s well-being. This followed the submission of an investigation report and other incidents. The company challenged the closure in court, and in 2023, the Administrative Court in Cottbus ruled in its favor, allowing it to seek compensation for the loss of business value. The firm’s lawyer, Jens Hennersdorf, had requested 26.327.391,13 euros as compensation for the loss of company value, but this claim was dismissed as “unfounded” by the court. However, Hennersdorf had also sought compensation for lost profits from 2013 to 2024, which the court found to be justified in principle. According to his calculations, the company could expect around one million euros per year, equal to its earnings in 2012—with annual increases leading to a total of 15.017.597,61 euros. In response, the Brandenburg Ministry of Education, Youth and Sports emphasized that the initial ruling already rejected approximately 40 percent of the claimed damages, or about eleven million euros. It stated that further proceedings would determine whether the Haasenburg GmbH is entitled to financial compensation and in what amount. The ministry plans to review whether it will file an appeal with the Higher Regional Court. During oral hearings held earlier this year, the court expressed doubts about whether the company could accurately project its 2012 profits into future years to calculate its profit loss. The firm reportedly faced significant losses in 2013 following declining occupancy rates due to public criticism. Questions remain about how much damage would have occurred even if the authorities had taken different actions. The core issue revolves around whether the ministry acted negligently or if its decisions were reasonable at the time. In November 2013, then Minister of Education Martina Münch (SPD) declared the home unchangeable after reviewing the investigation report, citing severe educational methods and declaring the facility unreformable. Ten years later, administrative judges ruled that instead of shutting the homes down, the ministry should have imposed additional conditions. However, ten years prior, both the Administrative Court in Cottbus and the Higher Administrative Court in Berlin-Brandenburg had ruled that closing the homes was appropriate given the balance between protecting children’s welfare and the operator’s interests. According to court spokesperson Viktoria-Sophie Eberlein, the Landgericht Potsdam assumes a “negligent breach of duty by the state.” The detailed reasoning behind the ruling has not yet been published. During the oral hearing, a key point was raised regarding the change in management at Haasenburg shortly before the incident came to light.