Deutsche Bank settles Kirch case in milestone deal
Deutsche Bank ended its decade-long battle with the heirs of late media mogul Leo Kirch on Thursday, closing one of Germany's most acrimonious corporate battles in a deal that will cost the country's largest lender about 900 million euros ($1.24 billion).
The deal concludes all legal disputes between Kirch and Deutsche Bank and helps to shorten a long list of claims, investigations and fines hanging over the bank.
Co-Chief Executives Anshu Jain and Juergen Fitschen are trying to clear the decks of "legacy issues" as they reshape the bank to meet more stringent regulatory demands and tougher markets.
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"We intend to make further progress in this regard, step by step, throughout 2014," the two CEOs said in a statement.
The settlement includes a payment of 775 million euros plus interest and a lump-sum reimbursement of costs that is expected bring the final sum to between 900 million euros and 925 million euros.
Deutsche Bank will charge its 2013 results for the settlement, pushing it about 350 million euros deeper into the red after tax and bringing its net loss to about 1.3 billion euros in the fourth quarter, which had already been hit by heavy legal and regulatory costs.
Before the Kirch settlement, Deutsche Bank had paid out about 5 billion euros in various settlements, fines and claims for 2012 and 2013 and had set aside a pot worth around 2.4 billion euros to deal with future problems.
Kirch, who died in 2011, had claimed that ex-Deutsche chief executive and later chairman Rolf Breuer triggered his media group's downfall by questioning its creditworthiness in a 2002 television interview. Kirch sought for years to recoup about 2 billion euros ($2.7 billion) in damages.
Deutsche Bank and its officers have denied that Breuer's comments led to the collapse of the Kirch empire.