Decision of the Federal Court of Justice on Claims of Wirecard Shareholders in Insolvency Proceedings
On November 9, 2023, the Federal Court of Justice (BGH) dealt with the question of whether shareholders of the insolvent Wirecard AG have claims as simple insolvency creditors against the insolvency estate (Case No.: IX ZR 127/24). In the published judgment, it was decided that shareholders do not have a claim as simple insolvency creditors under the Insolvency Act for the damage caused by the fall in share price.
Background of the Proceedings
Wirecard AG had to file for insolvency in 2020 after massive irregularities related to untraceable escrow funds became known. Insolvency proceedings over the company’s assets were opened, and the competent insolvency court appointed an insolvency administrator.
Subject of Dispute: Compensation for Share Price Loss
The proceedings centered on the question of whether shareholders who suffered a loss from the devaluation of their shares after the publication of false financial statements could assert this loss as a claim in the company’s insolvency proceedings.
Assertion of Claims in Insolvency Proceedings
Classification in Insolvency Law
Generally, only claims based on a legal relationship outside of membership in the company can be registered as insolvency claims (§ 38 InsO). The BGH has now clarified that damage from a share price drop “does not constitute such a claim.”
Exclusion as Insolvency Creditor
The Federal Court of Justice stated that shareholders bear their economic risk due to their participation in the company themselves. The loss in share value results from the company’s development and is fundamentally shaped by the corporate legal framework. In the event of insolvency, shareholders do not generally participate in the insolvency estate but are treated as subordinate.
No Equivalence with Other Creditors
Equal treatment with simple insolvency creditors is not considered. Claims arising directly from the status as a shareholder – particularly the pure financial loss from share devaluation – do not establish a registrable claim in the insolvency proceedings.
Implications for Shareholders
This highest court decision makes clear that shareholders of Wirecard AG – and in similar cases – are not entitled to participate in the distribution of the insolvency estate as simple insolvency creditors if their claim is based on compensation for the pure loss in share value. Only creditors who have claims on other legal grounds independent of shareholder status are eligible to register.
Note on Ongoing Criminal Proceedings and Source Situation
It should be noted that criminal investigations and court proceedings regarding the circumstances surrounding the insolvency of Wirecard AG are still ongoing, and the presumption of innocence applies until final judgment. The findings made are based solely on the BGH’s decision of November 9, 2023 (Case No.: IX ZR 127/24). (Source: https://urteile.news/BGH_IX-ZR-12724_Wirecard-Aktionaere-haben-keinen-Anspruch-auf-kein-Geld-als-einfache-Insolvenzglaeubiger-aus-der-Insolvenzmasse~N35561)
Significance for the Insolvency Law Protection of Investors
This decision highlights the limits of insolvency law protection for shareholders of publicly traded companies in the event of insolvency proceedings. Investors bear the risk of a total loss in their role and are not equated with simple insolvency creditors under the rules of insolvency law.
If you have legal questions related to insolvency proceedings or capital market transactions, you can find more information on comprehensive legal advice in insolvency law at https://www.mtrlegal.com/offices/deutschland/insolvenzrecht/.
