Capital market law compensation claims by Wirecard shareholders: Not to be considered as insolvency claims – Classification and background
The Wirecard case has sparked far-reaching national and international discussions regarding the liability and protection of shareholders. In particular, the question is in focus as to whether shareholders can register claims for damages arising from breaches of capital market law obligations as insolvency claims in the insolvency proceedings against Wirecard AG. With its judgment of November 29, 2022, the Regional Court of Munich I (Case No. 29 O 7754/21) has issued groundbreaking guidelines on this set of issues.
Classification of the decision of the Regional Court of Munich I
Background and subject matter of the proceedings
After the Wirecard scandal became public, numerous shareholders were exposed to massive losses in value. Many based compensation claims on the alleged violation of capital market law information obligations, particularly in connection with purportedly incorrect or missing ad-hoc disclosures as well as further breaches of capital market law requirements by the company or its governing bodies.
Against this background, shareholders have registered claims for damages with the insolvency administrator of Wirecard AG as insolvency claims for the schedule of claims (§ 38 InsO). The Regional Court of Munich I had to rule on the admissibility of this approach.
Key statement of the judgment
The Regional Court of Munich I clarified that compensation claims by shareholders based on capital market law cannot be registered as insolvency claims within the meaning of §§ 38 ff. InsO. In the court’s view, such claims are to be treated as subordinated within the meaning of § 39 para. 1 no. 5 InsO.
This is mainly justified by the fact that the asserted claims are subject to the equity nature of the shareholders. They reflect the corporate risk and liability relationship between shareholder and company, and must therefore be classified as subordinated insolvency claims. Alignment with actual creditors of the stock corporation, whose claims are based on an exchange relationship, would contradict the regulatory concept of insolvency law.
According to the court, reference to possible tort-based compensation claims does not lead to a different result. Even with tortious legal bases, the link to the shareholder’s corporate participation remains decisive.
Legal and practical consequences for shareholders
Impact on the insolvency proceedings
By qualifying as a subordinated claim under § 39 para. 1 no. 5 InsO, claims arising from the acquisition or subscription of shares based on the violation of capital market law information obligations are considered in insolvency proceedings only after the full satisfaction of all prior-ranking insolvency claims (e.g., claims from supplies, services, loans, etc.). In practice, this usually means that actual satisfaction of such claims is excluded.
Distinction from other creditor groups
A key concern of insolvency law is the equal treatment of creditors, taking into account their respective ranking and risk relationships. The court emphasizes that shareholders, as ‘equity providers,’ participate in the entrepreneurial risk of the company and must therefore, in the event of insolvency, stand behind the claims of outside creditors. This also covers situations in which shareholders refer to breaches of duty by the company.
Capital market investor protection and subordination under company law
The decision reflects the systematic distinction between capital market law compensation claims and the principle of subordination in company law. While investor protection in KapMuG proceedings and the assertion of claims for damages arising from misinformation in the capital market are generally recognized, strict legal limits are found in insolvency proceedings where the claim is tied to shareholder status.
Outlook and further developments
The decision of the Regional Court of Munich I continues the restrictive line of case law regarding compensation claims in the area of capital market law, which are shaped by the corporate relationship between shareholder and company. The possibility for shareholders to realize claims as insolvency claims remains generally barred.
It remains to be seen whether this legal view will also be upheld in higher courts and in other, similarly situated cases. In the meantime, the proceedings concerning the political, regulatory, and criminal aspects of the Wirecard complex remain subject to ongoing investigations and court proceedings; the presumption of innocence applies accordingly.
Conclusion and possible steps
Under the current legal situation, shareholders who have suffered losses due to breaches of capital market law obligations are generally referred to a subordinated position in the insolvency proceedings. The court’s classification underlines the separation between capital market law claims for damages and the entitlement to claims under insolvency law.
Source: Regional Court of Munich I, judgment of 29.11.2022, Case No. 29 O 7754/21
Further legal advice
Given the complexity and ongoing legal developments surrounding the Wirecard case and in the field of capital market and insolvency law, it is recommended to consult with experienced legal advisors if questions or uncertainties arise. The lawyers at MTR Legal are available to provide sound assessments, both nationwide and internationally, especially for companies, investors, and other involved parties.
