Weil has successfully represented the insolvency administrator of a Luxembourg bond issuer in obtaining a judgment ordering that a claim in the amount of €900 million against now insolvent Wirecard AG be included in the insolvency table.

The case concerns the treatment of bonds issued on behalf of, in many cases listed, German stock corporations through a foreign subsidiary. According to the agreed financing structure, Wirecard AG established a wholly owned subsidiary for the purposes of issuing a €900 million convertible bond; Wirecard AG guaranteed the repayment of such bond and the subsidiary transferred the proceeds from the issuance to Wirecard AG in the form of a loan. The Munich I Regional Court has now held that the claim for repayment under the loan be approved in the insolvency table.

The aforementioned structure is used by many large DAX-listed companies as a mechanism for obtaining financing on the capital markets. The judgment now issued by the Munich I Regional Court, which is of tremendous relevance not only because of its implications for Wirecard AG’s insolvency proceedings, but also to the German capital markets in general, is the first judgment by a court of first instance finding that the agreed structure continues to apply even if the German parent is subject to insolvency proceedings.

The Weil team led by Frankfurt-based Litigation partner Britta Grauke has a proven track record of advising clients in high-profile legal disputes and proceedings concerning the interpretation of terms and conditions of securities. Another reason for the engagement of Weil was the Firm’s footprint in insolvency-related litigation.

The Weil team was headed by Litigation partner Britta Grauke and included partner Matthias Eiden (Insolvency/Restructuring, Frankfurt) and associate Nicolas Nöller (Insolvency/Restructuring, Frankfurt).