Dusseldorf, Berlin According to a judgment by the Munich I Regional Court, Wirecard shareholders are left empty-handed in the event of insolvency. They are not considered creditors and can therefore not assert their claims for damages as a claim against the insolvency administrator Michael Jaffe, the court announced on Wednesday.
It therefore dismissed a lawsuit for 243 million euros against Jaffe. The fund company Union Investment had sued.
With the judgment, Jaffe could also dismiss a large part of the claims against the insolvent payment processor. Around 22,000 shareholders are demanding seven billion euros after the then Dax group had to file for bankruptcy in the summer of 2020 as a result of a multi-billion dollar fraud scandal. Banks, social security funds and other Wirecard creditors have filed claims of over 3.3 billion euros.
With its judgment, the regional court confirmed the previous practice, according to which the claims of shareholders in insolvency proceedings are served at most subordinately. German insolvency law gives priority to banks or bondholders. First their claims are served before others get a chance. As a rule, shareholder claims come last.
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Wirecard collapsed in June 2020 when 1.9 billion euros in the balance sheet turned out to be air bookings. Just a few days later, the payment service provider from Aschheim near Munich went bankrupt. Since then, insolvency administrator Jaffe has secured assets worth more than one billion euros.
Union Investment filed a lawsuit in the summer of 2021 and estimated the damage caused to its investors by the collapse of Wirecard at 243 million euros. The central fund company of the Volks- und Raiffeisenbank argued that statements and company announcements from Wirecard had persuaded it to buy the securities. However, these have been fraudulent and misleading for years.
Case will end up in federal court
The last word has not been spoken with the decision of the district court. Even before the verdict, it was clear that the losing party would fight the case all the way to the Federal Court of Justice. According to the will of all those involved, legal history should be written there and the supreme court should clarify whether shareholders can be treated equally after insolvency with banks and other lenders. It could be a long time before a verdict is reached.
Meanwhile, Union Investment and other investors have their sights set on another address to make claims that are possibly more promising – the auditors from EY. The company checked Wirecard’s books for around a decade and always certified them without qualification.
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The special investigator Martin Wambach, employed by the Bundestag investigative committee, already issued a devastating reference to EY in a special report in April 2021 – the report suggests various violations of professional duties. In addition, a professional law procedure by the auditor supervisory authority Apas against EY and individual auditors is about to be completed.
It is becoming apparent that the supervisor sees numerous breaches of duty. If the auditors are proven to have acted with gross negligence or intent, the usual liability limit for auditors of four million euros does not apply. Apas wants to make a decision in January.
Before that, the criminal investigation continues. From December 8th, the long-standing Wirecard CEO Markus Braun and two other former managers will be put on trial. They are charged with gang fraud and market manipulation, among other things.
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