A German court ruled Tuesday that a lawsuit by a German media tycoon accusing a Deutsche Bank official of undermining his company can proceed.
Media mogul Kirch, left, says that comments by Breuer cost him his company
It began with a TV interview and ended with a bankruptcy, or so one German media tycoon says.
Leo Kirch, head of the now-bankrupt Kirch media group is accusing Rolf Breuer, Deutsche Bank board chairman, of irreparably damaging the credibility of his company.
As a result, Kirch filed a lawsuit which the Federal Court of Justice in Karlsruhe said could proceed. Judge Gerd Nobbe ruled Tuesday that Breuer's comments "violated a duty not to endanger the creditworthiness of the unit" and violated confidentiality. The bank had a business relationship with a unit of the company.
No capital available, Breuer said.
Kirch had a vast empire which included film and pay-tv
Kirch says that Breuer hurt his company's credit worthiness during a 2002 television interview by implying that banks would not continue to extend credit to the company. As a result, Kirch maintains that the group became insolvent because it affected his ability to raise money to turn his company around.
In the interview, Breuer, then the bank's chief executive, told Bloomberg TV "that the finance sector is not prepared, without changes, to make further capital available."
The Kirch group filed for bankruptcy in April 2002.
The federal court limited the suit to damages incurred by the Kirch group's Printbeteiligungs GmbH, with which Deutsche Bank had a contractual relationship. And it is up to Kirch to show that Breuer's comments caused the company's insolvency.
The court ruled that Breuer can be held personally liable
Kirch's attorney Peter Gauweiler called the decision only a partial victory. The court did not put a value on the lawsuit. Estimates show that the subsidiary is worth between 600 million and 1.5 billion euros ($737 million and $1.84 billion).
Deutsche Bank attorney Peter Heckel told the Associated Press that to suggest that Breuer's comment led to the loss of that amount was "absolutely incorrect" and said he did not expect the suit to be successful.
Kirch tried before
Kirch tried to get the courts interested in Deutsche Bank before. In 2004, he filed a lawsuit against the bank in US federal court accusing the bank of trying to eliminate his company.
The court dropped the case. And last spring, he asked German prosecutors to investigate the bank for falsifying balance sheets relating to his company. Prosecutors found no evidence for the charges.