Deutsche backs Taurus' Kirch suit
EmptyBERLIN -- Deutsche Bank is backing a lawsuit against Leo Kirch as part of its complicated legal wranglings with the former Bavarian media mogul.
Deutsche Bank on Thursday confirmed media reports that it is supporting "both financially and with information" the €9.3 million ($12.7 million) suit against Kirch brought by Taurus Holding.
Taurus was the umbrella holding company for Leo Kirch's vast media empire before it filed for bankruptcy protection in June 2002.
The Taurus suit, brought by insolvency administrator Rolf Breuer, concerns money Taurus paid out to third parties between Feb. 5 and April 15, 2002 -- just before the company went belly up. Breuer claims Taurus already was insolvent at that point and no money should have been paid. He is suing to reclaim it for Taurus creditors.
By supporting the Taurus suit, Deutsche Bank hopes to gain ammunition for its own legal battle with Leo Kirch. Kirch has sued Deutsche Bank for €1.6 billion ($2.2 billion) in damages, claiming former Deutsche Bank CEO Rolf Breuer pushed Kirch's empire into bankruptcy by questioning its credit worthiness.
The Kirch suit centers on comments Breuer made to Bloomberg TV on Feb. 3, 2002. In a live interview, the Deutsche Bank boss cited news reports at the time, saying "from what one is reading and hearing, the financial sector is not prepared to supply further funds or outside resources (to Kirch)."
At the time, Deutsche Bank was one of Kirch's major creditors. Kirch was unable to roll over its loans, and the company's core division, KirchMedia, ended up having to file for insolvency in April 2002. Other Kirch divisions, including KirchPayTV and Taurus Holding, followed in June 2002.
"It was a death sentence for KirchGroup," Kirch's lawyers said about Breuer's comments.
But the Taurus Holding suit complicates matters for Leo Kirch.
In order to prove that the payments made by Taurus in early 2002 were justified, his lawyers must demonstrate that, between February and April, the company was in solid financial health. This would seem to contradict the "death sentence" theory.
By backing the Taurus suit, Deutsche Bank will gain access to Kirch documents which the bank hopes will prove that Breuer's comments were not the key factor in the fall of the Kirch empire.
According to sources near Taurus, the Deutsche Bank paid nearly $10 million to support the suit and gain access to Taurus documents.
Leo Kirch's lawyers could not be reached for comment Thursday.