Deutsche Bank recently proposed a settlement to shareholders who sued the bank for underpaying them during the acquisition of Postbank. However, according to a lawyer representing the plaintiffs, Jan Bayer, the offer was deemed as insufficient. Bayer went as far as calling the offer a “crackhead” one that is “dead on arrival”. The proposed settlement would mark a turning point in a lengthy legal battle that has plagued Deutsche Bank for years.
The key element of the proposed settlement revolves around an offer to compensate the shareholders 36.50 euros per Postbank share. Despite the specifics of the offer, Deutsche Bank did not comment on how it compares to the 1.3 billion euros set aside by the bank in anticipation of the legal proceedings. Bayer estimated that the offer falls significantly short of meeting at least 50% of the claims made by the plaintiffs.
Deutsche Bank initiated the acquisition of Postbank back in 2008 amidst the global financial crisis. The aim was to expand its reach in Germany and secure a stable income source. However, the acquisition quickly turned sour with consumer complaints, regulatory inquiries, and costly legal battles. Claims of underpaid former shareholders have persistently haunted Deutsche Bank, leading to prolonged litigation in the courts.
In a surprising move, a court in Cologne demonstrated sympathy towards the former shareholders’ claims, prompting Deutsche Bank to make a substantial provision to cover potential liabilities. This unexpected development forced the bank to forgo plans of rewarding investors and repurchasing its own shares, resulting in a quarterly loss and halting a 15-quarter profit streak. The upcoming hearing in the Cologne court will play a crucial role in the resolution of the dispute, with pressure on both Deutsche Bank and the plaintiffs to reach a settlement.
A Rejection of the Offer
Lawyer Jan Bayer conveyed his dissatisfaction with Deutsche Bank’s proposed settlement to his clients, advising them to wait for the court’s decision. He emphasized that the offer was significantly inadequate, urging the plaintiffs to hold out for a more favorable resolution. The outcome of the upcoming court hearing will likely have far-reaching implications for both Deutsche Bank and the aggrieved shareholders.