Deutsche Bank Rejects Out-of-court Settlement In Kirch Case

Deutsche Bank AG (DB) said Thursday it won't accept an out-of-court settlement with the heirs of the late media mogul Leo Kirch, extending a decade-long legal battle.

"The Management Board of Deutsche Bank has thoroughly reviewed a proposal for the settlement of the legal disputes initiated by Dr. Leo Kirch and his associates. Based on this review ... the Board decided without dissent not to accept the settlement proposal," the bank said in a statement.

Judge Guido Kotschy from the higher district court in Munich last year suggested Deutsche Bank pay EUR775 million to the heirs of Leo Kirch. But such a deal was facing resistance within Deutsche Bank's management board, Dow Jones Newswires reported last week citing people familiar with the negotiations.

Kirch, whose media company, Kirch Group, collapsed in 2002 in Germany's largest postwar bankruptcy, died in July aged 84, but his estate has continued to pursue the case against Deutsche Bank. Under the original claim, Leo Kirch sought more than EUR3 billion.

In a 2002 television interview, Deutsche Bank's then-CEO, Rolf Breuer, said it was unlikely anyone would provide Leo Kirch with any more credit. Kirch, a Deutsche Bank client, sued the bank, accusing Breuer of violating his right to confidentiality under German banking laws. Kirch also alleged Breuer sought to damage his company in order to obtain a lucrative deal to split up the media empire.

-By Eyk Henning, Dow Jones Newswires, 49 69 29 725 108; [e-mail]