Lawyer complains about Deutsche Bank’s late compensation proposal in ongoing dispute with Postbank

A lawyer representing the plaintiffs in a long-running dispute criticized Deutsche Bank on Friday for what he described as a “late and insufficient” deal proposal regarding its acquisition of Postbank, one of Germany’s leading retail banks, in the late 2000s.

The controversy revolves around allegations that Deutsche Bank significantly undervalued Postbank during its acquisition, which has been under legal scrutiny since 2010. The case involves several hundred plaintiffs, including institutional and individual investors, with multiple lawsuits still ongoing.

Jan Bayer, senior partner at law firm Bayer Krauss Hueber, told CNBC that Deutsche Bank proposed a settlement of 36.50 euros per Postbank share last Thursday. The plaintiffs have a tight deadline, having only until next Monday to issue a response.

The settlement offer was first reported by Reuters and came shortly before a scheduled session of Cologne’s appeals court on Wednesday. Bayer expressed skepticism about the timing and sincerity of the offer, noting that the bank had previously indicated different intentions. It stressed that the likelihood of all parties accepting the offer was slim, especially since at least one claimant had already declined.

Bayer criticized the timing of the offer, which came during a holiday period, complicating efforts to reach all claimants in a timely manner. Its firm represents about 50 claimants, mostly institutional, seeking total damages close to 1 billion euros.

A Deutsche Bank spokesperson, while refraining from detailed comment, mentioned ongoing mediation talks with various plaintiff groups in connection with the Postbank acquisition. However, the details of those discussions remain undisclosed.

The protracted legal battle has significantly affected Deutsche Bank’s recent financial performance. After a significant €1.3 billion provision for the case, the bank reported a net loss for shareholders last month, its first in four years. Despite these challenges, Deutsche Bank shares are up nearly 12% year-to-date, according to the latest LSEG data.

Deutsche Bank had previously defended its position, arguing that the plaintiffs’ demands for a higher takeover bid were unfounded, a claim initially upheld by the Cologne Higher Regional Court in 2020. However, this decision was overturned in 2022 by the German Federal Court of Justice and the case was sent back for a new ruling.