Deutsche Bank: no settlement of $2.7BN lawsuits

JUERGEN BAETZ

BERLIN (AP) — Deutsche Bank AG said Thursday its board has rejected a proposed settlement in a long-running court case over hefty damages claims related to the bankruptcy of the late German media tycoon Leo Kirch.

The bank has declined to comment on the settlement's value, but German media have put it at about euro800 million ($1.1 billion). Kirch and his associates sought some euro2 billion ($2.7 billion).

Germany's biggest lender said it has thoroughly reviewed the proposal to settle the dispute, but its management board unanimously decided to reject the offer after considering "internal and external legal advice."

Analysts have said a costly out-of-court settlement could expose Deutsche Bank to lawsuits from its shareholders.

Kirch accused Breuer of undermining his Kirch Media group's creditworthiness and contributing to its eventual bankruptcy in a February 2002 television interview by implying that banks would not lend it any more money.

A spokesman for Kirch's family criticized Deutsche Bank's decision as the result of "chaotic leadership," German news agency dapd reported.

Kirch's representatives reportedly reached an initial agreement with the bank's management last month on the settlement. Deutsche Bank declined to comment at the time.

The bank's outgoing CEO, Josef Ackermann, has hinted that he wants to put an end to the almost decade-old saga during which Kirch, who died last year, initiated several proceedings against the bank and its executives.

Ackermann will hand over to two new co-CEOs Anshu Jain, currently head of investment banking, and Juergen Fitschen, now head of regional management, after the bank's shareholder meeting in May.

Deutsche Bank's shares were up by 2.11 percent to euro36 in late Thursday Frankfurt trading.

Kirch, a towering business figure in postwar West Germany, was a friend of longtime German Chancellor Helmut Kohl, and had business ties with News Corp.'s Rupert Murdoch and Italian Premier Silvio Berlusconi.

The reclusive Bavarian winegrower's son built a media group that at its height included a thriving film rights trading business, stakes in publisher Axel Springer and in Germany's second-biggest TV broadcaster ProSiebenSat.1, TV rights for the football World Cup and a majority stake in Formula One motor racing.

But Kirch's media empire crumbled in 2002 under some euro6.5 billion in debt following a money-losing venture into pay television and acquisitions that didn't pay off.