Shareholders of the insolvent Wirecard AG cannot register claims for damages in the insolvency proceedings. This was decided by the Munich Regional Court with a ruling on 23.11.2022 (Ref. 29 O 7754/21).
In the Wirecard scandal, shareholders have suffered significant financial losses. The hope of being able to assert claims for damages through the insolvency proceedings has suffered a severe setback due to the ruling of the Munich Regional Court. Since shareholders are not creditors, they cannot register their claims in the insolvency table, the court decided.
For Wirecard shareholders, there are other ways to assert claims for damages independent of the insolvency proceedings. Capital market law offers the possibility of a model procedure under the Capital Market Investors’ Model Proceedings Act (KapMuG), explains the business law firm MTR Legal, which is focused on capital market law. Such a KapMuG proceeding is pending at the Bavarian Higher Regional Court.
The model procedure is directed against the former CEO of Wirecard AG and the auditors. The allegation against the auditors: They approved Wirecard’s financial statements for years, although the figures had been inflated since 2015 according to investigations by the public prosecutor’s office. The model procedure is to clarify, among other things, whether the auditors are liable for damages.
Shareholders can still join the model procedure to assert their claims for damages. In the KapMuG proceeding, a lead plaintiff is first determined. The judgment then binds this lead plaintiff and the defendants. The decision can subsequently be applied to the remaining plaintiffs who have joined the KapMuG proceeding. Advantages of participating in the model procedure include that there is no significant litigation cost risk for the plaintiffs and the limitation period for claims for damages is suspended.
Following the ruling of the Munich Regional Court, shareholders are likely to go empty-handed in the insolvency proceedings. The court followed the principle that shareholders are equity holders and their claims are subordinated in the insolvency proceedings. The claims of the other creditors take priority. Union Investment had filed the lawsuit, arguing that the decision to invest in Wirecard shares was made based on false corporate figures and that Wirecard had violated its information obligations. However, the Munich Regional Court decided that the deception was irrelevant for registering the claims in the insolvency proceedings.
Lawyers experienced in capital market law advise Wirecard shareholders on their options. Registration for the model procedure must be carried out by a lawyer.
