Commerzbank Unit Sued in Delaware Over Trust Payments

A unit of Commerzbank AG, Germany’s second-biggest bank, was sued in a U.S. court by investor Ocampo International SA for more than 50 million euros ($65.8 million) in missed payments since 2010 from trust securities.

The unit, Hypothekenbank Frankfurt AG, formerly Eurohypo AG, set up two Delaware trusts to raise capital from international investors, and stopped making payments in 2009, British Virgin Islands-based Ocampo said in a Delaware Chancery Court complaint filed yesterday in Wilmington.

“Due to the actions of its ultimate parent, Commerzbank, the bank has ceased to be a profit-maximizing business” and “it is now impossible for the bank to record a balance sheet profit,” according to court papers.

Germany’s top civil court, the Federal Court of Justice, ruled May 28 that Eurohypo wrongly stopped payouts on profit-dependent securities and that Frankfurt-based Commerzbank must continue to pay interest on those investments.

“The bank, and its ultimate parent Commerzbank, have substantially benefited” from suspension of payments, according to Ocampo’s Delaware complaint. “Commerzbank group realized equity gains of approximately 290 million euros” through trust-share repurchases.

Commerzbank spokesman Nils Happich declined to comment on the lawsuit.

Shares of Commerzbank, which was forced into an 18.2 billion-euro state bailout, rose the most since October 2011 on Aug. 8 after second-quarter earnings fell less than analysts had estimated.

The case is Ocampo International SA v. Eurohypo Capital Funding LLC I, CA8863, Delaware Chancery Court (Wilmington).