The German Federal Court of Justice (Bundesgerichtshof) has issued a ruling that significantly diminishes the prospects of recovery for a prominent investment firm pursuing damages related to the devastating Wirecard collapse. In a decision handed down Thursday, the court determined that the investment firm does not qualify as a “simple” insolvency creditor, effectively relegating its claims to a lower priority in the distribution of remaining assets.
The investment firm, which purchased and subsequently sold Wirecard shares on the secondary market between 2015 and 2020, had asserted capital market law claims against the company. These claims centered on allegations that Wirecard fraudulently presented a non-existent business model and misrepresented its financial standing, arguing that had the firm possessed accurate information, it would not have invested.
Lower courts had seen conflicting rulings on the matter. The regional court initially rejected the claim, while the higher regional court issued a partial ruling upholding the firm’s right to pursue the insolvency claims. However, the Bundesgerichtshof’s decision overturns this previous stance, maintaining that capital market law damages claims are intrinsically linked to the status of being a shareholder and therefore must take a subordinate position within the insolvency process behind those of more straightforward creditors.
The ruling highlights a stark reality of the Wirecard affair: approximately €15.4 billion in claims have been registered against the insolvent company, but only around €650 million remains available for distribution. Consequently, the investment firm and likely other shareholders pursuing similar legal action, faces the bleak prospect of recovering little to nothing.
This decision raises critical questions about the protections afforded to investors in complex financial structures and the limitations of legal recourse in cases involving widespread corporate fraud. While the ruling aims to prioritize the claims of standard creditors, it also underscores the immense financial losses suffered by investors caught in the fallout of what many consider one of Germany’s most significant corporate scandals. The ongoing legal battles surrounding Wirecard are likely to continue, though this latest ruling significantly alters the landscape for those seeking redress.