DB failed in court! Court supports Deutsche Postbank shareholders' claim for 100 million euros

Intelligible Finance learned that Deutsche Bank (DB.US) has been ordered to increase compensation to a group of former Postbank investors as part of a long-running stock valuation dispute that has already cost the German bank billions of euros. A local court, Cologne Appeals Court, upheld an earlier ruling on Wednesday in favor of investors seeking a total of €100m ($108m) in damages. The decision could also affect other lawsuits still pending in lower courts.

The legal conflict dates back to Deutsche Bank's acquisition of Postbank and the amount it paid for the German postal bank in 2010. Deutsche Bank had promised to pay €25 per share of Postbank. The investors said they should have been paid €57.25 - the price Deutsche Bank paid for its then-rival in 2008.

After a hearing in April, the judge warned that he might rule against Deutsche Bank. The bank had set aside up to €1.3bn for legal losses since then. In August, it reached a settlement with a group of plaintiffs representing 60% of the total claims. Deutsche Bank said earlier in the day that the agreement allowed it to reduce its provision to €547m.

Elliott Investment Management, one of the plaintiffs in the settlement, received nearly €200m in compensation. Deutsche Bank also reached settlements with two smaller investors in September.

The plaintiffs argued that Deutsche Bank effectively controlled Postbank through the deal. In the current case, the plaintiffs are seeking €57.25 per share, while other similarly litigating investors are seeking €64.25 per share. The first case was filed in 2010, and the lawsuits have gone through various ups and downs since then. The German Supreme Civil Court has already ruled on the dispute twice, in 2014 and 2022, always sending the case back to lower courts to examine more issues. In the last appeal, Cologne Appeals Court dismissed the lawsuits, but the 2022 Supreme Court decision changed the perspective.