A regional court in Germany has ruled former investors in the Hypo Real Estate lender are not entitled to higher compensation. Some lost a fortune when the bank collapsed during the global financial crisis.
Former shareholders in Germany's property lender Hypo Real Estate failed to secure more compensation for the losses they incurred when the bank crashed at the start of the global financial crisis, and was kept alive only thanks to a generous state bailout plan.
A regional court in Munich ruled Friday investors were not entitled to receive more than the 1.30 euros ($1.70) per share the received when the lender underwent forced nationalization. The judges found that the money paid was a fair deal in as far it mirrored the average share price in the three months before nationalization in 2009.
The ruling therefore coincided with the reasoning of other courts where plaintiffs had tried to get a better deal.
Money down the drain
As the global financial crisis unfolded, Hypo Real Estate shares plummeted to unseen lows. The lender's bankruptcy was only prevented in the end by a state bailout of some 100 billion euros.
The government in Berlin and the country's central bank (Bundesbank) argued that Germany's second-biggest property lender was too big to fail.
"Failure to provide the rescue package may have triggered unpredictable consequences for the German financial and economic system similar to those of the collapse of US financial group Lehman Brothers," the Bundesbank and finance regulators wrote in a joint letter to the state finance authority BaFin.
hg/jr (dpa, Reuters)