BERLIN — Former media tycoon Leo Kirch has filed a E1.6 billion ($2.1 billion) lawsuit against Deutsche Bank and its former topper Rolf Breuer in connection with their role in the 2002 collapse of his vast media empire.
It’s the latest salvo in an ongoing legal battle that began shortly after the dramatic bankruptcy of the Kirch Group.
Last year, Germany’s highest court upheld a lower court decision that Deutsche Bank and Breuer were partially responsible for Kirch’s troubles and liable for damages. The court ruled that Breuer violated client confidentiality in a 2002 interview in which he cast doubt on Kirch’s creditworthiness while his company was struggling under a mountain of debt.
In January, Kirch demanded $1.8 billion from Deutsche Bank, a request the bank rejected, saying it was “without substance.”
Kirch argues that Breuer’s comments caused lenders to refuse him further credit, which led to the insolvency of Kirch Media, the core division of the Kirch Group, the first of several subsidiaries to go under.
The court ruling limited damages Kirch can collect, saying Deutsche Bank could be held liable only for damages to the Kirch Group’s Print Beteiligungs division, which had an outstanding loan of some $800 million from Deutsche Bank.
The division also held a major stake in publishing giant Axel Springer, which went to Deutsche Bank in lieu of the loan fol-lowing Kirch’s collapse. Kirch has valued the lost Springer stake at $1.3 billion.
Kirch’s massive insolvency resulted in a tectonic realignment of Germany’s media sector and paved the way for Haim Saban’s takeover of former Kirch broadcasting unit ProSiebenSat 1, which he recently sold to private equity firms KKR and Permira for some $4 billion.