Wirecard AG

Wirecard AG is insolvent. The company announced on June 25, 2020 that it was submitting paperwork to the Amtsgericht München – the District Court of Munich – to open insolvency proceedings on account of impending insolvency and over-indebtedness. For the shareholders and bond investors, the accounting scandal and subsequent insolvency i

Aktienrecht - MTR Rechtsanwälte

The British Financial Times has been reporting on accounting irregularities from as early as 2019. These reports were categorically denied by the company, which felt it necessary to commission a special audit. However, this brought no reprieve. On the contrary, the auditors criticized, among other things, the company’s willingness to cooperate and missing documents.

Nearly two billion euros missing

The accusations were borne out on June 18, 2020 when Wirecard AG was once again unable to present the annual and consolidated financial statements for 2019. The auditors refused to issue an audit certificate, pointing to a lack of evidence accounting for 1.9 billion euros supposedly held in escrow accounts at banks in the Philippines. Shortly thereafter, the company was forced to admit that the escrow accounts in question with a purported overall balance of just under 2 billion euros likely do not exist. Wirecard AG subsequently filed for insolvency, having issued 500 million euros worth of bonds as late as fall of 2019. The public prosecutor’s office is investigating the scandal on suspicion of, among other things, market manipulation and fraud.

Claims in connection with insolvency proceedings

Investors in stocks, bonds and derivatives are potentially facing enormous losses. If insolvency proceedings are opened, the creditors will be able to register to have their claims included in the insolvency schedule. Yet given the substantial liabilities, there will not be much left for them. The shareholders will find themselves right at the back of the queue, their claims treated as low priority (assuming there is still anything left to distribute). While things look a little rosier for investors as far as insolvency proceedings are concerned, they too should not expect to receive much. Even if individual parts of the business are sold and the sums generated go towards the insolvency estate, this is unlikely to be enough to satisfy creditors’ claims.

Asserting claims for damages

To ensure that not all their money is gone for good, investors can assert claims for damages. The pickings from the insolvent company are expected to be slim. Given the inflated balance sheet figures and suspicion of market manipulation, claims can also be directed against members of Wirecard AG’s executive and supervisory boards as well as the auditors. The latter rubber-stamped the balance sheets over the years despite blatant incongruities.

As lawyers with experience in the field of capital markets law, we can advise Wirecard investors on their legal options, including the possibility of damages claims.

Make an appointment at one of our locations in Cologne, Berlin, Dusseldorf, Frankfurt, Hamburg, Munich or Stuttgart!
MTR Koeln
Konrad Adenauer Ufer 83
50668 Cologne
+49 221 2927310
MTR Berlin
Kurfürstendamm 21
10719 Berlin
+49 30 56849999
MTR Bonn
Friedrich-Ebert-Allee 13
53113 Bonn
+49 228 92959978
MTR Dueselldorf
Königsallee 92a
40212 Düsseldorf
+49 211 99339944
MTR Frankfurt
Messeturm, 25. Floor
Friedrich-Ebert-Anlage 49
60308 Frankfurt am Main
+49 69 90283999
MTR Hamburg
Überseeallee 10
20457 Hamburg
+49 40 42237992
MTR Muenchen
Maximilianstraße 35a
80539 München
+49 89 70809904
MTR Stuttgart
Königstraße 10c
70173 Stuttgart
+49 711 98809964
Do you have any questions?
Make an appointment at one of our locations in Cologne, Berlin, Dusseldorf, Frankfurt, Hamburg, Munich or Stuttgart!