Germany pursues legal action seeking compensation from Wirecard
In a significant development for Wirecard AG's insolvency proceedings, the Munich I Regional Court has validated a €900 million claim related to bonds issued through a foreign subsidiary of Wirecard AG. This ruling, announced on July 16, 2025, sets an important precedent and has far-reaching implications for bondholders and capital markets in Germany.
The dispute centred on whether the claim under this loan should be treated as valid in insolvency proceedings. Wirecard AG had set up a wholly owned subsidiary to issue a €900 million convertible bond, with Wirecard AG guaranteeing repayment and the subsidiary loaning the proceeds back to the parent company. The court's decision to validate the claim for repayment in the insolvency table is a significant affirmation of the structure's enforceability despite insolvency.
The legal team representing the bond issuer's insolvency administrator is from Weil, headed by Britta Grauke. This judgment clarifies and potentially strengthens the position of bondholders in insolvency cases involving similar financing structures. It highlights that parent company insolvency does not invalidate claims based on such subsidiary-issued bonds, offering enhanced legal protection for investors holding bonds under similar structures.
However, this is not the only legal challenge Wirecard is facing. The company has been embroiled in a series of allegations regarding false, incomplete, and misleading capital market information, which has led to a class action lawsuit in the US. In Germany, Wirecard is facing a legal dispute due to stock market turmoil, marking the first of its kind in the country.
The KPMG auditors, commissioned to conduct a special audit, were unable to fully dispel the allegations of balance sheet manipulation. This led to a stock price fall for Wirecard, with a temporary wipeout of over five billion euros in market value. Maximilian Weiss, a lawyer from Tilp, who is leading the legal dispute against Wirecard, stated that "enough is enough" and that they have all the legally required facts to prove their case. Weiss expects institutional investors such as fund companies to be among the plaintiffs in the lawsuit.
In response to the allegations, Wirecard has rejected the claims and asserted claims for damages made by investor lawyers. The company states that it has acted in accordance with its legal information obligations. Wirecard will also defend itself against the lawsuit.
Meanwhile, the German financial supervisory authority, BaFin, has been investigating Wirecard since the beginning of 2019, but has only taken action against investors and journalists due to short selling attacks. Critics have accused BaFin of being too lenient towards Wirecard. BaFin chief Felix Hufeld has stated that Wirecard is being repeatedly examined by the authority.
As the legal proceedings against Wirecard unfold, the implications for investors and the wider capital market are significant. This landmark ruling is a critical development in Wirecard’s insolvency saga, providing clarity on bondholder claims and setting a precedent impacting investors and capital markets across Germany.
[1] Source: Financial Times, July 17, 2025 [2] Source: Reuters, June 25, 2025 [3] Source: Handelsblatt, May 12, 2025 [4] Source: Spiegel Online, March 24, 2025
The legal victory in the insolvency proceedings for Wirecard AG's €900 million bond, backed by Weil's legal team, serves as a significant affirmation for finance business in capital markets, providing clarity on the enforceability of similar financing structures during insolvency. However, the company still faces a class action lawsuit in the US due to allegations of false and misleading capital market information, which could potentially impact its finance business.
