Deutsche Bank Settles 60% of Claimants in Postbank Litigation

Deutsche Bank Settles with Claimants

In a major development, Deutsche Bank announced it has reached settlements with 60% of claimants in the Postbank litigation, a legal dispute that has spanned over a decade. The bank anticipates a €430 million boost to its pre-tax profits for Q3 as a result.

Details of the Settlement

On Wednesday, Deutsche Bank revealed that it came to an agreement with more than 80 plaintiffs in one of its longest-running legal battles. Notably, this includes the largest individual plaintiff, who represents roughly one third of all claims.

• The settlements were calculated at €31 per Postbank share, accounting for about 45% of the booked provisions.
• Deutsche Bank set aside a €1.3 billion provision earlier this year, following indications from a Cologne court that it might rule in favor of the plaintiffs.
• Market response was stable, with Deutsche's share price holding steady in Frankfurt trading shortly after the announcement.

Claims and Historical Context

These settlements stem from former Postbank shareholders’ claims over the years, arguing that Deutsche Bank paid an overly low price for their holdings. They contend that the bank had effectively gained control much earlier while purchasing out minority investors. Their positions date back to Deutsche's initial stake acquisition in 2008 and subsequent increases through 2010.

1. The claimants assert that Deutsche Bank overlooked a legal obligation to offer mandatory takeover terms when Postbank shares were valued at €57.25, as opposed to the €25 per share price that it eventually paid.
2. Their claims were initially dismissed by Cologne courts in 2011 and 2012 but were later overturned by Germany's Federal Court of Justice.
3. Despite losing a trial in 2017, Deutsche Bank filed an appeal, leading to ongoing litigation.

This significant case raises important questions about shareholder rights and the obligations of companies during acquisitions.