Deutsche Bank Found Partly Liable Over Kirch Media Bankru
The Munich Higher Regional Court ruled the lender and its former Chief Executive Officer Rolf Breuer are liable for statements in 2002 before the Kirch group filed for bankruptcy. The late media magnate’s heirs seek as much as 2 billion euros ($2.6 billion).
The case is one of several lawsuits continuing after Leo Kirch’s July 2011 death that allege the bank secretly plotted to bring about the end of his media empire. Part of the conspiracy, they argue, was a 2002 interview on Bloomberg Television in which 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.
After almost two years of hearings, the court next will hear more testimony from expert witnesses on how much to award in damages, Presiding Judge Guido Kotschy said.
The trial spawned its own criminal probe over Breuer’s testimony last year. Former Deutsche Bank CEO Josef Ackermann, former Chairman Clemens Boersig and former board member Tessen von Heydebreck are also under investigation over their testimony in the case. Deutsche Bank has denied wrongdoing by any of its executives.
“In every litigation that takes that long, there are always setbacks like this one today,” Peter Heckel, a lawyer for the bank, said. “But this isn’t the end of the story.”
The court ruled today on appeal, overturning a lower court’s dismissal of the suit. The judges said Deutsche Bank can’t fight the case further. Heckel said the bank will analyze the written judgment and then decide whether to petition the top court to allow a second appeal.
At the last hearing, in November, Kotschy urged them to settle, saying the court would likely find the bank liable, at least in part, and damages could range from 120 million euros to 1.5 billion euros. The court hasn’t changed its assessment since then, he said today.
This case bundled claims by 17 former Kirch companies in the group. Six units’ cases were dismissed. The judges said one, Kirch Media, can seek damages because it had to sell 70 million shares of ProSiebenSat.1 Media AG (PSM) in August 2003 for 7.50 euros per share. Alongside 10 others, including one that held a Formula One stake and the sports broadcasting rights group, it can also claim damages caused by the Breuer interview, they ruled.
“This court intends to create a new legal rule: holding a person liable for making use of his freedom of speech while making use of his constitutional right to the free exercise of your profession,” Markus Meier, another lawyer for Deutsche Bank, told the judges today. “The top civil court must look into whether that legal creation should be allowed to stand.”
Deutsche Bank rejected a settlement offer in March. The lender and Kirch’s heirs discussed a possible 800 million-euro deal, a person with knowledge of the negotiations said at the time. The Frankfurt-based bank last year was said to have rejected a 775 million-euro accord proposed by the Munich court.
Kirch, who was 84 when he died, sought as much as 3.3 billion euros in his claims against Breuer and Deutsche Bank. He started his legal battle in 2002 after his group filed the biggest German bankruptcy. A case seeking about 1.5 billion euros is pending at another chamber of the same Munich court.
Today’s case is: OLG Muenchen, 5 U 2472/09.
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