ACTIONS CORNER
In the dispute with QVT over unpaid interest on participation certificates, Eurohypo has sustained a bitter defeat in Frankfurt District Court. The court ruled that the real-estate finance company has to pay interest for 2009 on those participating certificates still being serviced in 2008 in spite of losses, even if the payment creates a further loss. In addition, the Commerzbank subsidiary should not, in the opinion of the Court, make the holders of certain participation rights participate in losses by reducing the face value of the paper. The District Court thus accepted the U.S. hedge fund’s suit against the bank, on 15 February.
Daimler has been incriminated by Paris judicial authorities in a case of insider trading in EADS shares already decided in favour of the Stuttgart group. The proceedings had been regarded as already complete. In the midst of discussion about Daimler's future role in the aerospace group, French public prosecutors are now officially investigating the former witness. The proceedings for insider trading, in which EADS's major private shareholders, Daimler and Legardère, have now been inculpated, are about the accusations that the automaker sold 7.5 percent of its units in both 2006 and 2007 using its knowledge of technical difficulties with the A 380.
On 8 February Ulrich Wiechers indicated during the trial of an action by Ille GmbH that the Deutsche Bank had according to his assessment breached its duty of care in the distribution of spread-ladder swaps. The presiding judge of the Federal Court also criticized that the bank’s complex interest-rate products did not fit the role it aspired to, of being the preferred partner of the middle class. The court adjourned its decision to 22 March. According to industry estimates, the institution has sold the interest-rate swap products to a three-digit number of companies.
Leo Kirch’s action for damages against Deutsche Bank has failed in Munich I Regional Court. Judge Brigitte Pecher threw out the so-called ‘Print-Klage’ in all respects. The Kirch Group had according to the Munich court suffered no damage attributable to the Bank through the interview with Rolf Breuer in February 2002 in which, a few months before the bankruptcy, he questioned the credit rating of the nested group. The media tycoon claims the then Deutsche Bank CEO was responsible for the failure and is calling for 1.3 billion euros in damages. Together with other cases, the total concerned is 3.5 billion euros.
The Deutsche Bank has been excluded from proprietary trading in equities and derivatives in South Korea for six months due to unfair trading practices. The South Korean Financial Services Commission FSC claims the Bank is responsible for a crash on the Seoul stock exchange on 11 November 2010 that wiped out 26 billion dollars in stock-market value. Its subsidiary DSK had achieved €29 million in "unfair" trading profits and should therefore suspend trade from April to September, the Seoul financial watchdogs said on 23 February. Investigations continue against five employees.
Fresenius has lost on appeal too, in the action for avoidance of decisions of the 2009 AGM. The Frankfurt Higher Regional Court found partly in favour of Gabriele Kröner, and annulled discharge to the Board and Supervisory Board of the health group for the business year 2008. The plaintiff had challenged the discharge decisions, carried overwhelmingly. Kröner, former Supervisory Board member and daughter of the former board chairman, had also taken action with five other shareholders against the merger of preferred and common stock, and had agreed a settlement with Fresenius in late January.
SAP on 23 February called on the District Court in Oakland, California to reduce the penalties imposed, from 1.3 billion dollars to a maximum of $ 408,700,000. In November 2010 a jury of the Court had found the the German software group guilty of large-scale theft of data from the competition. In a second application, the Walldorf group is seeking a completely new trial, should the amount of compensation, which is in the lawyers’ opinion based on pure speculation, not be reduced to the degree required. Judge Phyllis Hamilton will decide at a hearing on 13 July.
The corruption trial of Thomas Ganswindt for tax evasion and abetting by omission begins on 5 April, with three professional judges. The start of the proceedings at the end of January was interrupted after 15 minutes because the defenders had criticized the composition of the criminal division at the Munich district court with only two professional judges as understaffed given the complex and burdensome process. The prosecution alleges that the former Siemens Board member had as chief of the former telecom division intentionally violated his duty of supervision because he had condoned slush funds from 2001, though references to bribes for contracts abroad had been submitted to him.