Deutsche Bank Is Said to Be Nearing Kirch Settlement for About $1 Billion
By Karin Matussek – Feb 13, 2012 9:29 AM ET
Deutsche Bank AG (DBK) and the heirs of media entrepreneur Leo Kirch are close to settling a 10-year-old dispute for about 800 million euros ($1 billion), according to a person with direct knowledge of the negotiations.
The settlement will end lawsuits over whether comments made in 2002 by Rolf Breuer, Deutsche Bank’s then-chief executive officer, caused the collapse of Kirch’s media group, according to the person, who declined to be identified because the agreement hasn’t been made public. The bank last year was said to have rejected a 775 million-euro settlement proposed by a Munich court.
“The case meant negative headlines for Deutsche Bank. It wasn’t so much of a business problem as a reputational one for the company,” said Michael Seufert, an analyst with Norddeutsche Landesbank Girozentrale in Hanover who recommends investors hold the stock. “It is advantageous for Deutsche Bank to have this long-lasting legal process behind them.”
Kirch, who died in July, pursued lawsuits against Breuer and Frankfurt-based Deutsche Bank seeking at least 3.3 billion euros. The lawsuits, which continued after Kirch’s death, claim his media group failed because Breuer questioned its creditworthiness in a 2002 Bloomberg TV interview.
In the interview, Breuer said “everything that you can read and hear” is that “the financial sector isn’t prepared to provide further” loans or equity to Kirch. Within months, Kirch’s group filed the country’s biggest bankruptcy since World War II.
Another person familiar with the talks said that Deutsche Bank’s management board will discuss the potential settlement today or tomorrow. Details of the agreement aren’t finalized and there may still be obstacles in that process, the person said.
Deutsche Bank spokesman Christian Streckert and a spokesman for Kirch both declined to comment. The bank has always denied Kirch’s allegations.
Deutsche Bank gained 1.3 percent to 33.92 euros at 3:21 p.m. in Frankfurt trading.
Breuer last year agreed to pay 350,000 euros to settle a criminal attempted fraud case over testimony he gave in 2003 in one of the suits filed by Kirch.
The litigation spawned a separate criminal probe by Munich prosecutors over testimony Breuer gave last year in another Kirch case. Current Deutsche Bank CEO Josef Ackermann, Chairman Clemens Boersig and former board member Tessen von Heydebreck are also under investigation over their testimony. Deutsche Bank has denied wrongdoing by any of its executives.
The Munich Higher Regional Court, which has two related damage suits pending before it on appeal and previously urged the parties several times to settle, hasn’t received any information on a proposed agreement, court spokesman Wilhelm Schneider said in an interview.
Bild Zeitung reported the potential settlement earlier today.
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