Deutsche Bank Settlement Proposal Rejected by Shareholders’ Lawyer

Deutsche Bank has proposed a settlement to shareholders who sued the bank for underpaying them about the acquisition of Postbank. However, Jan Bayer, the lawyer representing the plaintiffs, deemed the offer too low. Bayer criticized the proposal as a “crackhead” offer, describing it as “dead on arrival.”

The proposed settlement would be a significant development in the ongoing litigation that has been a long-standing issue for Deutsche Bank. The bank has recently set aside 1.3 billion euros ($1.43 billion) in anticipation of a possible payout related to the case.

Settlement Offer and Comparison:

A key component of the proposed settlement includes an offer to pay shareholders 36.50 euros per Postbank share. Deutsche Bank has declined to comment on how this offer compares to the 1.3 billion euros it has provisioned for the case. Bayer estimates the offer is well below 50% of the total claims.

Deutsche Bank began its acquisition of Postbank, which has millions of clients and roots in Germany’s postal system, during the 2008 global financial crisis. The acquisition was intended to broaden Deutsche’s reach in Germany, but Postbank has since become a source of consumer complaints, regulatory scrutiny, and costly lawsuits.

Recent Developments:

In April, a court in Cologne expressed sympathy towards the former shareholders’ case, prompting Deutsche Bank to make the unexpected provision for potential claims. This led Deutsche to abandon plans for rewarding investors and buying back shares, resulting in a quarterly loss and ending a profit streak of 15 consecutive quarters.

The Cologne court is scheduled to hold a hearing on the case next Wednesday and may make a ruling. The court has urged Deutsche Bank and the plaintiffs to work towards a settlement. Bayer has advised his clients to wait for the court decision, stating that the current offer is “way too low.”