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3 years ago
Former Deutsche Bank CEO offers own cash in Kirch deal -lawyer
August 5, 2014 / 1:15 PM / 3 years ago

Former Deutsche Bank CEO offers own cash in Kirch deal -lawyer

FRANKFURT, Aug 5 (Reuters) - Deutsche Bank's former chief executive Rolf Breuer has offered to pay personally for part of a costly out-of-court settlement reached earlier this year with the heirs of the Kirch media empire, Breuer's lawyer said on Tuesday.

The bank's supervisory board last week decided to seek compensation from Breuer after ending a 12-year battle in February with the Kirch heirs.

Kirch, who died in 2011, blamed the country's largest lender for his group's demise, setting off one of Germany's most acrimonious corporate disputes, which was settled in a deal costing Deutsche about 925 million euros ($1.24 billion).

By making a claim against Breuer, Deutsche Bank can open the door to up to 500 million euros in compensation from so-called directors and officers' liability insurance.

Insurers Allianz and Zurich Insurance Group are the two principal D&O insurers for Breuer, a person familiar with the thinking of the supervisory board told Reuters. Allianz and Zurich declined to comment.

Wilhelm Happ, the Hamburg-based lawyer representing Breuer and who acts as his spokesman in the Kirch affair, said the 77-year-old former CEO and later chairman had not yet received a formal request for compensation but Breuer was cooperating and had already offered to help pay.

"I can confirm that Mr. Breuer is being very cooperative in the affair," Happ told Reuters by telephone.

Deutsche Bank is seeking to recuperate as much as possible of the 925 million euros it agreed to pay in the settlement, the source said.

Breuer's own contribution is likely to be only several million euros or a tiny fraction of the total claim, the person said. Happ declined to comment on the size of Breuer's contribution.

According to the source, the bank expects a contribution in the tens of millions of euros to the claim to come from insurance.

Deutsche Bank still expects to have to pay most of the settlement itself, the source said, and aims to have put the affair in the past by May 2015, when the bank holds its annual shareholder meeting.

Deutsche Bank declined to comment.

Kirch had claimed then-CEO Breuer triggered his media group's downfall by questioning its creditworthiness in a 2002 television interview. Kirch sought for years to recoup about 2 billion euros in damages.

In 2002, while he was participating in the World Economic Forum at New York's Waldorf-Astoria hotel, Breuer appeared to raise questions about Kirch Group's creditworthiness during a TV interview.

Breuer was also then chairman of Germany's private-sector bank association. Kirch argued the comments amounted to a signal for other creditors to discontinue funding.

The family later argued the statement was part of a deliberate scheme to force Kirch into bankruptcy so that the bank could reap hefty fees helping the group to restructure.

Deutsche Bank and its executives have denied that Breuer's comments led to the collapse of the Kirch empire.

But the case has occupied lawyers, the courts and the media for years, with Germany's constitutional court getting involved at one point, and has led to a number of additional lawsuits or criminal investigations. (Reporting by Kathrin Jones; Writing by Thomas Atkins, editing by Philipp Halstrick and David Evans)

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