The Financial Times reports that Deutsche Bank is facing bonus claims in both London and the US in respect of a profit-share scheme established for real estate executives at Bankers Trust, a US firm Deutsche acquired in 1999.
In the UK, Paul Rivlin and Neil Lawson-May, now executives with Eurohypo, claim that they are owed $6.4m, which is a 5% share in the profits from a lucrative commercial property venture they established between the bank and an Italian electricity company in 2000. The bankers content that the venture yielded Deutsche profits of around $128m, yet they didn't receive a penny, even though they claim that they were reassured that the deal would qualify for the profit share scheme. The case is due to go to trial in March.
Over in the US, the claim against Deutsche, also being brought by former members of the bank's real estate investment banking group, is said to be as high as $100m. According to the newspaper, members of the US group, which include former unit head Dick Gunthel, claim that the real estate group's assets 'were sold off for less than fair market value'. The executives put the true value of the portfolio at $2.4bn, yet Deutsche offloaded it for just $1.2bn. They lost out as a result. Although parts of this claim have already been dismissed, the US bankers have been allowed to pursue the bank for breach of good faith and fair dealing.
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