Ex-Deutsche Bank CEO to Pay Lender $3.6 Million in Kirch Damagesby
Deutsche Bank seeking to end litigation tarnishing reputation
Breuer said he didn't realize comments were `explosive'
Deutsche Bank AG said former Chief Executive Officer Rolf Breuer agreed to pay the lender 3.2 million euros ($3.6 million) after comments he made in 2002 spiraled into one of its most expensive legal disputes.
Deutsche Bank will also receive a net 90.1 million euros from insurance contracts covering Breuer under the terms of a settlement that is subject to investor approval at the annual shareholder meeting on May 19, the Frankfurt-based company said in an invitation to the meeting published on Thursday. The parties reached the settlement agreement on March 10 and March 11, it said.
Deutsche Bank is eliciting the personal payment from Breuer, who rose from trader to CEO in a career spanning 40 years at the lender, as it attempts to rebuild a reputation tarnished by litigation that has eclipsed its efforts to boost profitability. Co-CEO John Cryan is leading the crusade to swiftly resolve the bank’s legal challenges around the world, including probes into mortgage-backed securities.
“This is largely symbolic because the damages were a lot higher,” said Michael Seufert, an analyst with Norddeutsche Landesbank in Hanover who has a hold recommendation on the shares. “It allows Deutsche Bank to show its shareholders that it sought to get some of the money while probably being a bearable amount for Breuer.”
Deutsche Bank paid 927.9 million euros to the heirs and associates of failed media entrepreneur Leo Kirch in 2014 to settle their claims that the lender caused the demise of his empire. Breuer’s comments questioning the Kirch group’s creditworthiness, made in a Bloomberg TV interview shown on Feb. 4, 2002, were central to their allegations.
Breuer, who served as CEO from 1997 to 2002, said at a Munich court last year that he never meant any harm in the television interview and that he didn’t realize that his answers were “explosive.”