German Bank Fund Pays $2.9 Billion to Depositors of Maple Unitby
German banks have paid 2.6 billion euros ($2.9 billion) to depositors of a unit of Canada’s Maple Financial Group Inc. shuttered by the country’s banking supervisor after a dispute with tax authorities.
The BdB Association of German Banks expects to retrieve most of the funds from Frankfurt-based Maple Bank GmbH’s insolvency administrator, a spokesman for the banking group said by phone from Berlin. Retrieval rates of 90 percent or higher are typical for such cases, he said.
German banking watchdog Bafin closed Maple Bank this year after provisions for the dispute over tax refunds related to dividends threatened its stability. While Maple Bank is smaller than many German lenders, the compensation to depositors was the first after a July amendment to rules that form part of the global effort to prevent taxpayers shouldering the cost of failed banks.
BdB said 8 million euros covered deposits of 100,000 euros or less and the rest refunded depositors with up to 59.8 million euros each.
The new rules mean the compensation mechanism has to make payments within 20 working days. From July 1, the time limit drops to 7 working days, according to the statement.
Maple Bank, in business since 1994, asked the U.S. bankruptcy court in Manhattan for protection on Feb. 16. It deals in equity and fixed-income trading. German authorities are seeking to hold Maple Bank liable for alleged tax liabilities of up to 392 million euros, according to court papers.
Maple Financial is a closely held company based in Canada, whose shareholders also include Ontario Teachers’ Pension Plan, with a 28 percent stake, according to its website. The firm, which was formed in 1986, has more than 260 employees in Toronto, Frankfurt, London and Jersey City, New Jersey, among other locations. Its units include a German bank with branches in Canada and the Netherlands, and broker-dealers in Canada, the U.S. and U.K.