Deutsche Bank Suffers Blow In Legal Battle With Kirch

Germany's Deutsche Bank AG (DB) Thursday lost a petition in a decade-long legal battle with former media mogul Leo Kirch, whose heirs claim that a former Deutsche Bank chief executive's comments pushed Kirch Group into bankruptcy.

The district court in Munich Thursday dismissed the petition that three relevant judges of the higher regional court in Munich were prejudiced, saying the petition is "all in all unjustified." The court added the bank's accusations are largely not up with the truth and bare evidence. A Deutsche Bank spokesman declined to comment the decision.

Among the judges is Guido Kotschy, who had suggested Deutsche Bank pay EUR775 million to the heirs of Leo Kirch.

The proposed deal, which would mark one of the largest civil settlements in European history, is facing resistance within Deutsche Bank's management board, however, 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 at 84 years old, 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]