Bank to pay damages to bankrupt media mogul
BERLIN — Germany’s highest court ruled Tuesday that Deutsche Bank must pay damages to bankrupt media mogul Leo Kirch because of comments made by its former chief exec that caused the collapse of Kirch’s once-vast media empire.
The bank now faces a separate lawsuit to determine the amount of the damages.
Kirch is suing Deutsche Bank and Rolf Breuer, currently its supervisory board chairman, over a 2002 interview in which Breuer cast doubt on Kirch’s creditworthiness while his company was struggling under a moun-tain of debt.
The interview caused uncertainty in the Kirch Group among lending institutions, which recalled their loans.
Breuer’s comments “broke a duty not to endanger the creditworthiness of the unit” with which the bank had a business relationship, Judge Gerd Nobbe said at the Federal Court of Justice in Karlsruhe.
The decision upholds a 2003 ruling by the Munich Higher Regional Court, which said the bank could be held responsible for Breuer’s com-ments because they contributed to the collapse of Kirch’s company and violated German secrecy rules.
Tuesday’s ruling limits the amount of damages Kirch will collect, since the court held that Deutsche Bank could only be liable to the Kirch Group’s Print Beteiligungs division.
Deutsche Bank had loaned more than E700 million ($860 million) to Print Beteiligungs, requiring the bank to maintain secrecy about that busi-ness’s financial state, Nobbe said.
Kirch had argued the confidentiality requirement should extend to his entire company.
Print Beteiligungs held Kirch’s 40% stake in publishing giant Axel Springer, which now is seeking to take over ProSiebenSat.1, once Kirch’s core TV business.
Following Kirch’s insolvency, Deutsche Bank nabbed the Springer stake in lieu of the outstanding loan.
Nobbe advised Kirch and Deutsche Bank lawyers to settle out of court, adding, “Kirch will have to dismiss the idea of reversing the collapse of his company with the help of a lawsuit.”
Deutsche Bank lawyer Peter Heckel said the bank “strongly disagrees” that damages can be proven.