Deutsche Bank finds itself in the midst of a long-running legal battle surrounding its acquisition of German retail banking giant Postbank in the late 2000s. The crux of the challenge against the German lender is that it underpaid for the acquisition, sparking legal action that has been ongoing since 2010. The case has attracted hundreds of claimants, including both institutional and private investors, with various lawsuits in progress.
Plaintiffs’ lawyer, Jan Bayer from the law firm Bayer Krauss Hueber, has criticized Deutsche Bank’s proposed settlement as a “late low ball” offer. The German lender offered claimants 36.50 euros ($40.12) per Postbank share, which Bayer described as a tactic that had been planned for months. Despite the bank’s goal of avoiding a court decision by offering the settlement, Bayer believes the offer is unlikely to be accepted by all claimants, raising doubts about its viability.
The proposed settlement faces challenges as one claimant has already rejected the offer, signaling potential hurdles in reaching an agreement. With a hearing on the Postbank case scheduled at the Higher Regional Court in Cologne, the uncertainty surrounding the settlement adds further complexity to the legal proceedings. Bayer Krauss Hueber, representing around 50 institutional claimants, is pursuing claims totaling approximately 1 billion euros in connection with the case.
In response to the criticism of the proposed settlement, a Deutsche Bank spokesperson stated that the bank is engaged in settlement discussions with various plaintiffs involved in the Postbank takeover proceedings. However, the spokesperson refrained from providing further details on the status of the negotiations. The ongoing litigation has impacted Deutsche Bank’s financial performance, as evidenced by a net loss reported in the second quarter of the year.
The Higher Regional Court of Cologne had initially dismissed all claims in the proceedings, only for the ruling to be overturned by Germany’s Federal Court of Justice in 2022. The case was subsequently sent back to the Higher Regional Court for a new decision, prolonging the legal battle and adding to the uncertainty surrounding the outcome of the litigation. Despite the setbacks, Deutsche Bank remains hopeful of resolving the case through settlement discussions with the claimants.
The proposed settlement offered by Deutsche Bank has come under severe criticism from plaintiffs’ representatives, raising doubts about its acceptance and effectiveness in resolving the long-standing legal dispute. With the hearing scheduled at the Higher Regional Court in Cologne, the outcome of the case remains uncertain, placing additional pressure on both the bank and the claimants involved in the proceedings.
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