Wirecard: EY Germany tries to wriggle out of legal liability - aggrieved Wirecard investors go on the counterattack Emittent / Herausgeber: SCHIRP & PARTNER Rechtsanwälte mbB / Schlagwort(e): Rechtssache / Personalie Wirecard: EY Germany tries to wriggle out of legal liability - aggrieved Wirecard investors go on the counterattack 22.03.2024 / 11:12 CET / CEST Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.

EQS-News: Wirecard: EY Germany tries to wriggle out of legal liability - aggrieved Wirecard investors go on the counterattack (deutsch)

Wirecard: EY Germany tries to wriggle out of legal liability - aggrieved Wirecard investors go on the counterattack

Emittent / Herausgeber: SCHIRP & PARTNER Rechtsanwälte mbB / Schlagwort(e):
Rechtssache/Personalie
Wirecard: EY Germany tries to wriggle out of legal liability - aggrieved
Wirecard investors go on the counterattack

22.03.2024 / 11:12 CET/CEST
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.

---------------------------------------------------------------------------

EY tries to wriggle out of legal liability - how aggrieved Wirecard
investors go on the counterattack

Very unusual things are currently happening at Ernst & Young
Wirtschaftsprüfungsgesellschaft ("EY"). Aggrieved Wirecard investors are
preparing to counterattack.

What EY is currently doing: Double change of legal form

On 29 January 2024, EY passed a resolution in accordance with the German
Reorganisation Act (Umwandlungsgesetz, UmwG) and changed its legal form to
that of a limited partnership (KG). EY's four key service lines - audit,
tax, strategy and consulting - joined this limited partnership as limited
partners. Three of these service lines, namely tax, strategy and consulting,
had a special right of cancellation, meaning that they were allowed to leave
the limited partnership immediately after its formation and withdraw their
own business. All experts agree that this was an extremely unusual
contractual arrangement, this "quick in and out".

And lo and behold: Immediately after this conversion decision, namely on 1
February 2024, tax, strategy and consulting exercised their special right of
termination and left the newly founded KG immediately. The "quick in and
out" was therefore implemented within a few days.

The result of this double change of legal form:

1) The formerly unified German EY company, to which all four "service lines"
belonged with their entire business, is now only a limited partnership (KG)
with significantly reduced business volume. In addition to an insignificant
general partner, this limited partnership now only includes the auditing
department as a limited partner. This shrunken KG continues to be liable for
the Wirecard scandal.

2) The three other "service lines", i.e. tax, strategy and consulting, are
also liable for the Wirecard scandal for a further 5 years. After that,
however, they will be exempt from liability unless they can be brought to
justice first.

What EY says about the process: "Everything is completely harmless",
"Nothing to do with Wirecard"

EY claims that the change in legal form has nothing to do with liability for
the Wirecard scandal. Allegedly, EY Germany only wants to adapt its legal
structures to what is customary in other countries.

How Schirp & Partner Rechtsanwälte assess the process

Schirp & Partner Rechtsanwälte in Berlin/Germany, who are representing the
largest group of aggrieved Wirecard shareholders who brought legal action
before the Munich courts against EY, assess the situation differently. Dr.
Wolfgang Schirp says:

"We believe that EY is not telling the truth. We are convinced that EY is
primarily concerned with limiting liability for the Wirecard scandal and
getting the three fleeing "service lines", i.e. tax, strategy and
consulting, out of liability. A nasty trick that EY is trying to pull! But
the good thing is: If Wirecard plaintiffs act decisively now, they can beat
the opponent at its own game and put themselves in a position where EY has
to come to an agreement with them."

What needs to be done: Request collateral

In the case of reorganisations and changes in legal form, such as those
carried out by EY here, creditors have the right to demand collateral if the
fulfilment of their claims would otherwise be jeopardised. This is regulated
in Section 22 of the German Reorganisation Act (UmwG). These conditions
apply to the Wirecard plaintiffs. Plaintiffs should therefore issue such a
request for collateral. Dr. Wolfgang Schirp points out two main aspects:

"The requirements for a request for security pursuant to section 22 of the
German Reorganisation Act are met. In particular, there is no doubt that the
enforcement of legal claims is jeopardised if EY is allowed to shift liable
assets."

"A very important question will be against whom plaintiffs can enforce the
request for security. It is clear that plaintiffs can make a claim against
the remaining KG, although this has now been reduced in size. This means
that, in terms of economic substance, they can lay their hands on the
auditing division. However, the three "fugitive" service lines, namely tax,
strategy and consulting, are the ones they will not catch."

"At first glance, it is not entirely clear whether plaintiffs can also lay
their hands on the three "fugitive" service lines, i.e. tax, strategy and
consulting, with a request for collateral. Still, after careful
consideration we answer this question in the affirmative. This is because
the double change of legal form (conversion resolution and immediate
withdrawal of the three fugitive "service lines" from the KG) must be viewed
as a single overall transaction from an evaluative perspective. This is
primarily because the special right of termination for the three fugitive
service lines was already provided for and regulated in the transformation
resolution of 29 January 2024, including a provision on how the business is
to be withdrawn from the KG. If the double change of legal form of 29
January / 1 February 2024 is therefore, from a legal point of view, a
uniform process, then plaintiffs can direct their request for collateral
against all newly created legal entities, including the three fugitive
"service lines". And this is absolutely what they should do".

For further information, please contact:

Dr. Wolfgang Schirp, Schirp & Partner Rechtsanwälte mbB, Leipziger Platz 9,
D - 10117 Berlin, tel. [phone], mobile [phone], mail:
[e-mail], URL: www.schirp.com


---------------------------------------------------------------------------

Veröffentlichung einer Mitteilung, übermittelt durch EQS Group AG.
Medienarchiv unter https://www.eqs-news.com.

Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.


---------------------------------------------------------------------------