In a landmark decision, the German Federal Supreme Court has significantly strengthened the rights of insolvency administrators vis-à-vis auditing firms. The ruling of 11 December 2025 (III ZR 438/23) clarifies for the first time at the highest court level that insolvency administrators have comprehensive rights to information and inspection vis-à-vis the auditors of the insolvent company, including, in principle, with regard to so-called "working papers". The ruling was handed down in a liability case in the "Wirecard Complex," but has practical relevance in all situations in which insolvency administrators request access to the audit documents of auditors – often an important first step before examining and asserting liability claims.

A.    Facts

The case concerned the insolvency proceedings relating to the assets of W. AG i.L. and W. Technologies GmbH i.L. The insolvency administrator asserted extensive claims against the previous auditing firm, in particular for information about the content of working papers, access to these files and answers to specific questions about the quality of the audit. The background to this was considerable criticism by a parliamentary committee of inquiry, which had identified "serious omissions" on the part of the auditors in the audit of the financial statements.

B.     Key decision of the German Federal Supreme Court

In its decision, the German Federal Supreme Court clarified the following fundamental questions:

1.      Audit contracts as agency agreements The German Federal Supreme Court classifies contracts for annual and consolidated financial statement audits as contracts for work and services of an agency nature in accordance with Section 675 (1) of the German Civil Code (BGB). This is of crucial importance, as it means that the provisions of Sections 666 and 667 BGB on information, accountability and disclosure apply.

2.      Comprehensive rights to information and inspection Pursuant to Section 675 (1) and Section 666 BGB in conjunction with Section 80 (1) of the German Insolvency Code (InsO), insolvency administrators have comprehensive rights vis-à-vis the auditor. These include:

• Information about the contents of the working files

• Disclosure/inspection of the complete files

• Answers to specific questions about the quality of the audit

3.      Scope of the obligation to disclosure The claim for disclosure generally covers the entire working papers within the meaning of section 51b (1) and (5) German Auditing Regulations (WPO), including all correspondence with third parties, notes on meetings with third parties and the documents created by the auditor. The only exceptions are:

• Internal working papers

• Records of personal impressions from discussions with third parties

• Collections of confidential background information

•   Documents already in the client's possession

However, the German Federal Supreme Court has clarified that the term "internal working papers" must be interpreted narrowly. Only those documents are excluded from the obligation to disclosure which the auditor has prepared solely for himself as a working aid for the performance of his assignment and which are therefore only relevant to him. On the other hand, records that document the audit procedures performed and are therefore necessary to provide a third party with an accurate picture of the activities carried out by the auditor in accordance with Section 51b (1) WPO are not excluded from the obligation to disclose.

The burden of proof for a restriction of the obligation to disclose lies with the auditor.

4.      Scope of the duty to provide information The right to information does not only apply to the part of the documents that would also have to be disclosed. Rather, the right to information goes beyond this and does not require the client to need the information to prepare further claims.

5.      Important clarification regarding the statute of limitations The statute of limitations for claims under Section 666 (2) and (3) of the BGB begins at the latest upon termination of the engagement – a "postponement until the claim is asserted" does not apply. The existence of the subjective requirements is affirmed without further justification; it is merely clarified that no knowledge or grossly negligent ignorance of misconduct on the part of the annual auditor is required.

6.      No automatic "prohibition of destruction" There is no automatic right to prevent the destruction of the working papers. In particular, there must be a risk of repetition or first-time commission.

C.    Implications for practice

• Strengthening of enforcement options in investigating the causes of insolvency and considerable facilitation of evidence preservation

• "Internal working papers" must be interpreted narrowly: a blanket defence based on the argument that they are "internal" is not convincing – the auditor bears the burden of proof if he wishes to exclude documents.

• Keep an eye on the statute of limitations: anyone who needs documents/information from older audit years should act early. Claims can quickly become time-barred if the assignment was a long time ago.