Deutsche Bank Counts on Ackermann Testimony in Kirch Lawsuit
Deutsche Bank AG (DBK) Chief Executive Officer Josef Ackermann is scheduled to testify tomorrow to rebut judges’ preliminary view that the lender may have tried to pressure Leo Kirch to hire it to restructure his media group.
Ackermann, Chairman Clemens Boersig and other executives will testify in Kirch’s 2 billion-euro ($2.8 billion) suit at a Munich appeals court. Deutsche Bank asked to call the men to rebut Kirch’s claim the bank intentionally tried to hurt Kirch’s company. The judges called Kirch’s version of events “not unlikely” in a preliminary opinion obtained by Bloomberg News.
The case is part of a dispute over a 2002 Bloomberg television interview by Rolf Breuer, the Frankfurt-based bank’s CEO at the time. 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. Four months later, Kirch Holding GmbH filed the country’s biggest bankruptcy since World War II.
“The possible damage the interview caused could be that a free restructuring wasn’t possible anymore” had Kirch declined to hire the bank, the court said in the March 24 opinion. The bank’s “liability can be earnestly considered,” the court said.
The bank and Breuer deny wrongdoing. Deutsche Bank spokesman Christian Streckert said the lender won’t comment on the court documents. Kirch is happy that the court is scrutinizing what actually happened, according to a spokesman who declined to be identified.
In the March 24 opinion, the judges said “it doesn’t seem unlikely” that Breuer “with his interview wanted to stress Kirch’s lacking creditworthiness in order to exert pressure on Kirch to move under the protective shield” of Deutsche Bank under terms determined by the lender.
“Ouch -- that’s pretty tough language,” said Wegner. “While all of this is preliminary, Deutsche Bank’s situation in that court isn’t exactly comfortable.”
German courts issue “indicative rulings” to summarize how the judges see a case at a certain stage, said Wegner, who isn’t involved in the litigation. The March 24 opinion was preliminary and could change after the presentation of all the evidence.
Sometimes judges use strong language in preliminary rulings to pressure the parties to settle, he said. Deutsche Bank rejected a 775 million-euro settlement proposed by the judges as part of the March 24 opinion.
The court cited a sequence of “crucial” events in early 2002. A Jan. 27, 2002, meeting with Gerhard Schroeder, Germany’s chancellor at the time, who discussed Kirch’s fate and was attended by Breuer. That was followed by a Deutsche Bank management board meeting on Jan. 29, 2002, where Kirch’s 40 percent stake in Axel Springer AG (SPR), held by the lender as collateral, was an issue. The Breuer interview was broadcast Feb. 4, 2002.
At a Feb. 9, 2002, one-on-one meeting, Breuer told Kirch that Deutsche Bank could act as a “protective shield,” which Kirch rejected, the court said. Five days later the lender scheduled a meeting with the media group’s banks “even though” Deutsche Bank wasn’t one of Kirch’s so-called pool banks, the court said.
Ackermann and Boersig will testify about the Jan. 29, 2002, management board meeting. The court summoned the men at Deutsche Bank’s request to back its claim that the executives didn’t decide to actively approach Kirch. Breuer had also told the judges at a February hearing that Deutsche Bank wanted to accept a mandate by Kirch “if we would have been approached.”
In an April 9 ruling, where the court set the schedule for hearing evidence, it said that statement isn’t in line with the minutes of the board meeting. It asked Deutsche Bank to clarify that “possible” contradiction. It also gave the bank a list of facts to clarify.
Management-board member Hermann-Josef Lamberti is also scheduled to testify tomorrow. Juergen Fitschen, another board member, will be heard at a later date. The judges scheduled another three hearings to questions witnesses.
The court rejected a contractual claim at a March 25 hearing after testimony from Kirch and former Deutsche Bank co- head of investment banking Michael Cohrs. The judges are now reviewing the claim that the bank intentionally tried to hurt Kirch’s media group.
The case is: OLG Muenchen, 5 U 2472/09.
To contact the reporter on this story: Karin Matussek in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com