Wirecard AG – Claims for damages against corporate bodies and auditors

Alberto VettorettiManaging Partner, Dezan Shira & Associates

With Wirecard AG now insolvent, investors are potentially facing severe losses. Shareholders and investors in Wirecard bonds and derivatives can assert claims for damages. 

While the extent of Wirecard creditors’ losses is as yet incalculable, the liabilities of the former DAX-listed company are likely to be enormous. Media reports are quoting a figure of 1.6 billion euros in bank loans alone. This amount does not include the value of claims brought by other creditors, not to mention the 500 million euros’ worth of bonds that Wirecard only issued in September of 2019.

 

In light of these significant liabilities, even selling lucrative parts of the business is unlikely to substantially improve the situation for Wirecard investors. The insolvency estate is also unlikely to be large enough to satisfy creditors’ claims. Wirecard shareholders ought to be worried about the prospect of losing all their money considering that their claims will be treated as low priority in insolvency proceedings, i.e. right at the bottom of the priority list. While things look a little rosier for bond investors, they too should anticipate severe financial losses in the course of insolvency proceedings. 

Claims can be included in the insolvency schedule once the court has decided to open insolvency proceedings. Investors should then be sure to register their claims in the insolvency schedule as well. We at the commercial law firm MTR Rechtsanwälte note that they can also respond to the looming financial losses facing them by having someone review the possibility of asserting claims for damages.

 

A few days prior to filing for insolvency, Wirecard AG was forced to admit that 1.9 billion euros it supposedly held in escrow accounts in the Philippines probably do not exist. With the Munich Public Prosecutor’s Office having already opened investigations on suspicion of market manipulation due to allegedly false information, the scope of the investigations has since been expanded. 

Given that balance sheet figures were clearly inflated, claims for damages may have arisen against members of Wirecard AG’s executive and supervisory boards, the liability of whom may extend to their private assets. Claims against the auditors are also a possibility. They have been issuing audit opinions for the annual balance sheets over the years despite these seemingly featuring spurious figures.

 

Lawyers with experience in the field of capital markets law can review Wirecard investors’ claims for damages.