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Court Cases

Deutsche Bank sentenced to damages over Kirch bankruptcy

A German court has ordered Deutsche Bank to pay damages to the heirs of late German media mogul Leo Kirch, finding the bank guilty of the collapse of the Kirch media empire. The exact sum, however, has not been fixed.

The Munich higher regional court found Deutsche Bank to be responsible for the 2002 insolvency of Kirch media group, but it rejected to stipulate the exact amount of damages to be paid by the German flagship bank.

Instead, the court ordered the two parties to name arbiters by the end of January, who should be charged with finding a financial settlement.

Leo Kirch - who died last year, aged 84 - originally sought damages to the tune of 2 billion euros ($2.6 billion), claiming the downfall of his media empire was triggered by former Deutsche Bank CEO Rolf Breuer.

In 2002, Breuer questioned Kirch Group's creditworthiness, saying in a television interview that he could "read and hear" that other banks were not prepared to provide more funds to Kirch.

During the trial, Kirch's lawyers suggested the collapse of the group was the intent of Deutsche Bank and other members of Germany's "business elite" to split up the media holding. Lawyers for Deutsche Bank dismissed such allegations, arguing the interview had changed nothing because the group would still have become insolvent.

Rolf Breuer told the court that he didn't intend to imply a lack of creditworthiness with the interview nor did he seek to win a restructuring mandate by putting public pressure on Kirch.

However, the Munich judge said earlier in the trial that he could not accept Breuer's claim that his comments about Kirch were an accident.

On Friday, Peter Gauweiler, the lawyer of Leo Kirch's heirs, indicated that the settlement might be higher than 700 million euros - a sum which was previously declined by Deutsche Bank as an out-of-court settlement.

"We will not settle for just that because the court's ruling means that much more is possible," Gauweiler said.

Friday's verdict is final as the court also ruled that the case could not be brought to a higher court of appeal.

uhe/hc (dpa, Reuters, AFP)