EY announced its restructuring in March. picture alliance / NurPhoto | Jakub Porzycki
Former Wirecard shareholders are suing EY Germany over a restructuring.
EY’s recent complex restructuring could make it more difficult to enforce claims for damages in the Wirecard case.
The lawyers claim that the restructuring constitutes an expropriation of assets, making it difficult for former shareholders to obtain compensation.
The Wirecard scandal shook the financial world and a large number of legal disputes followed. Former shareholders of the collapsed German payments group are now suing EY Germany for alleged asset transfer, reports „Financial Times“ (FT). The lawsuit raises the question of whether a complex restructuring of the Big Four company could make it more difficult or even impossible to enforce damages awards.
Former shareholders sue EY
The auditing company Ernst & Young (EY) announced a restructuring a few weeks ago. EY officially justifies the restructuring to become a KG in Germany by saying that the structure harmonizes with other companies in the EY network in Europe and worldwide. Plaintiffs fear that the restructuring will make it more difficult to enforce claims for damages.
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Lawyers for former Wirecard shareholders claim that EY Germany moved assets, making it difficult to enforce claims for damages. The restructuring of the Big Four company is seen as a potential obstacle to investors’ demands, writes the FT. The lawyers emphasize that this expropriation of assets represents a reaction to the hurdle to legal prosecution of the auditing company’s alleged breaches of duty.
They argue that the restructuring could result in the legal entity against which lawsuits have been filed becoming assetless. This would make it even more difficult for former shareholders to receive compensation. The lawyers claim the restructuring was done in bad faith to protect assets from the Wirecard litigation. They are therefore demanding an investigation by the court.
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