Deutsche Bank branch in the financial district of Frankfurt, Germany, May 6, 2022.
Alex Kraus | Bloomberg | Getty Images
A lawyer representing a plaintiff in a long-running lawsuit Deutsche Bank On Friday, it slammed the deal proposed by German lenders as a “late and low price”.
The challenge for Deutsche Bank is that it paid too little for its acquisition of Postbank, a major German retail bank, in the late 2000s.
Legal action against multi-level marketing has been ongoing since 2010. The number of plaintiffs is in the hundreds, and various lawsuits are ongoing from both institutional and individual investors.
Deutsche Bank offered the claimants a settlement of 36.50 euros ($40.12) per Postbank share on Thursday afternoon, Jan Bayer, a senior partner at law firm Bayer Krauss Hueber, told CNBC. The claimants have until Monday to respond.
The news was first reported by Reuters on Friday.
A trial is scheduled to be held on the Postbank case. At the Higher Regional Court in Cologne, Germany, on Wednesday.
“This tactic (late low ball rollover offer) has been planned for months, despite statements from the banks to the contrary and warnings we made months ago that there was a risk that this tactic would not work,” Bayer said. He told CNBC via email.
He added that the offer must be accepted by all claimants, one of whom has already rejected it, meaning a deal is unlikely to be reached unless the terms are changed.
“The bank’s goal of avoiding a court ruling on Wednesday has been frustrated and any agreement looks unlikely,” Bayer said, adding that the timing of the “unannounced offer in the middle of the holiday season” meant the firm could not be certain it would be able to contact all claimants by the deadline.
Bayer Krauss Hueber is representing about 50 primarily institutional plaintiffs in various lawsuits surrounding the case, Bayer said. They are seeking damages of around 1 billion euros.
“As we have said in the past, we are in settlement discussions with various groups of plaintiffs in the Postbank acquisition process. We cannot comment further on the status of those talks,” a Deutsche Bank spokesperson told CNBC in an email Friday.
The Postbank lawsuit has had a negative impact on the recent results of Germany’s largest lender. In its second-quarter results last month, Deutsche Bank reported its first net loss attributable to shareholders in four years, largely due to a €1.3 billion provision for the Postbank scandal. Deutsche Bank’s shares plunged on the news at the time, but are up about 12% since the start of the year as of Friday, according to LSEG data.
In a previous lengthy statement on the case, released in April, Deutsche Bank said the plaintiffs’ argument that the bank had a duty to make a higher takeover bid had been “successfully refuted,” adding that the lender believed the argument was “invalid.”
In 2020, the Cologne Higher Regional Court dismissed all claims in the case, but this decision was overturned by the German Federal Court of Justice in 2022 and the case was sent back to the Higher Regional Court for a retrial.
