Union Investment, Germany’s third-largest asset manager, has filed a complaint in Munich against the administrator of Wirecard, which over the past year sold the remaining assets of the failed payments group.
The asset manager said it suffered losses of 243 million euros when Wirecard filed for bankruptcy in June 2020. Before being exposed as a sham, Wirecard was hailed as a rare German technological success and was worth more than € 24 billion at its peak in 2018, replacing Commerzbank in the country’s top-notch Dax index.
The lawsuit cites more than 70 corporate press releases and statements made by Wirecard between 2014 and 2020 that Union says are misleading and fraudulent.
” Our client [Union] was led to buy the securities by fraudulent and misleading statements from Wirecard, ”said Nadine Herrmann, lawyer at Quinn Emanuel, adding that shareholders’ claims should be treated the same as other creditors in the context of a insolvency proceedings.
Claims of equity holders in insolvency proceedings are usually a last resort under German law, settled only after the other creditors have been paid.
“For us, the consequence [of that] would be not to receive any compensation, ”said a Union spokesperson, adding that the lawsuit was motivated by the need to act“ in the best interests of our clients ”.
If successful, the lawsuit would be a blow to the banks and bondholders who have loaned Wirecard more than 3 billion euros and would be forced to share any payment from the administrator.
According to a report seen by the Financial Times, creditors, shareholders and other aggrieved parties have filed more than 14 billion euros in claims with administrator Michael Jaffé.
Jaffé and his team have so far generated around € 600 million from selling Wirecard’s assets, including its European core business to Spanish lender Santander and Wirecard North America to US payment firm Syncapay.
In addition to these products, 300 million euros in cash are held at Wirecard Bank. The administrator also assesses whether to file a claim against the former members of the board of directors of Wirecard for their directors ‘and officers’ liability insurance, as well as against EY, the former auditor of the payment group. .
Wirecard’s other creditors rejected Union’s claim, filing two legal opinions with the administrator outlining their case.
The lawsuit brought by Union is a test case for a larger group of institutional shareholders who suffered losses of nearly € 2 billion in the Wirecard collapse and who want to be compensated. Burford Capital, a London-listed lender, is funding the lawsuit.
A spokesman for the Munich District Court confirmed that the lawsuit was recently filed, but a court date has not been set. “It is not yet predictable when a decision will be made,” the spokesperson said.
A spokesperson for the Wirecard administrator declined to comment.