Exclusive: Prosecutors reject Deutsche Bank’s settlement offer in Postbank case By Reuters

By Tom Sims

FRANKFURT (Reuters) – Deutsche Bank has proposed a settlement to shareholders suing Germany’s largest lender for underpaying them for its acquisition of Postbank, but the offer is too low, the plaintiffs’ lawyer said on Friday.

Lawyer Jan Bayer (OTC:) dismissed the bank’s offer as “crazy” and “dead from the moment it arrived.”

Any settlement would mark a major development in the years-long litigation that has dogged Deutsche Bank and recently forced it to set aside 1.3 billion euros ($1.43 billion) ahead of any potential payment.

“As we have stated in the past, we are in settlement discussions with various groups of plaintiffs as part of the Postbank acquisition proceedings,” Deutsche Bank said in a statement in response to a Reuters request for comment, adding that it would not comment specifically on the latest developments in the talks.

A key element of the settlement is an offer to pay shareholders €36.50 per Postbank share.

Deutsche Bank declined to comment on how its offer compared to the €1.3 billion it has set aside for the case. Baer, ​​the plaintiff’s lawyer, said his “wild guess” was that Deutsche’s offer was well below 50% of the claims.

Deutsche Bank began the process of acquiring Postbank, which has millions of customers and has strong roots in the country’s postal system, during the global financial crisis in 2008.

At the time, the bank was seeking to expand its footprint in Germany with a steady stream of income after years of rapid international expansion, but instead, Postbank became a source of consumer complaints, regulatory scrutiny and costly lawsuits.

For years, lawsuits alleging that Deutsche Bank underpaid former shareholders for its acquisition of Postbank have been bouncing around the courts.

The case took a dramatic turn in April, when a court in Cologne appeared sympathetic to the former shareholders’ case, prompting Deutsche to take the unexpected step of compensating any potential claims.

Following this, Deutsche canceled its plans to reward investors and buy back its own shares, and reported a quarterly loss, breaking a 15-quarter winning streak.

The Cologne court is scheduled to hold a hearing in the case next Wednesday and may issue a ruling. The court urged Deutsche Bank and the plaintiffs to work toward a settlement.

Bayer said he sent the offer to his clients and told them the offer was “too low.”

“We recommended waiting until the court’s decision on Wednesday,” Bayer said.

(1 dollar = 0.9105 euro)