Bloomberg reports that a Munich high court ruled last week that Deutsche Bank is liable for damages, expected to run into millions of dollars, for comments its former chief executive made in a 2002 TV interview about the general financial state of now-collapsed media giant Kirch Group.
The Munich state court had previously ruled that Deutsche could face unlimited damages because the German banking secrecy laws had been violated. At issue were comments Breuer made in a Bloomberg TV interview last year. He articulated his view that banks would be reluctant to provide further loan funding to Kirch because of its parlous financial position.
Breuer's view, and not an unreasonable one, was that the Group's financial troubles were already well known and that there was enough around in the press to justify his comments. He felt strongly that he was not giving up any confidential information. Kirch, on the other hand, claimed that his comments were untrue, caused other lenders to harden their positions and said that this hastened the demise of the Group.
The court said in its statement that 'the bank was obliged to keep details of its client relationships secret'. Breuer himself escaped personal responsibility and Deutsche will pick up any tab. Kirch had sought in excess of $122m in damages, but the final bill could be far greater than that. Another trial will be scheduled to decide the extent of the damages and Kirch lawyers have been heard to claim that the final settlement could be in the 'billions'. Kirch will, however, have to justify the level of the final award and this could prove difficult.