In a new development, over 50,000 Wirecard shareholders may now have hope for compensation in the insolvency proceedings. This follows a recent decision by the Munich Higher Regional Court, which allows shareholders to file claims in the bankruptcy process.
The Munich Higher Regional Court (OLG) has ruled that Wirecard shareholders can register their claims in the insolvency proceedings. This decision came after asset management firm Union Investment, which had purchased Wirecard shares for 33 of its clients between 2015 and 2020, sued insolvency administrator Michael Jaffé. The case was first reported by the “Süddeutsche Zeitung”.
The ruling is not final, as it is an “interim judgment”. The judges did not decide on the justification or the amount of the compensation claims filed by Union Investment. The case had initially been rejected by the Munich Regional Court in the first instance. The next word will now come from the Federal Court of Justice (BGH) in Karlsruhe, where insolvency administrator Jaffé wants to seek a final clarification on whether shareholders’ claims have the same rank as those of creditors owed money by a bankrupt company.
Significant financial implications
The case involves substantial sums of money. According to the OLG, about 50,000 Wirecard shareholders have filed claims for damages amounting to approximately 8.5 billion euros. In total, Wirecard creditors are demanding 15.4 billion euros. So far, insolvency administrator Jaffé has secured 650 million euros from the insolvency estate. Unless missing billions unexpectedly surface, creditors will only receive a small portion of their claims.
Jaffé considers the claims of creditors to be prioritized. This is because Wirecard owes significant amounts to both lending banks and former employees. Shareholders, on the other hand, have suffered stock losses but have neither lent money to the company nor provided any services for which Wirecard remained indebted. If shareholders were to have equal claims, much less money would be left for creditors, Jaffé argues.
Ongoing legal battles
The collapse of the DAX-listed company in summer 2020 resulted in hundreds of civil lawsuits in addition to criminal proceedings. A large portion of these lawsuits are claims for damages by former Wirecard shareholders and investors against ex-CEO Markus Braun, who has been in pre-trial detention since summer 2020, and the auditing firm EY, which had certified Wirecard’s allegedly false financial statements.
