German institutions in class action against IKB
GERMANY - A number of institutional investors seek to reclaim damages of at least €10m from ailing IKB Deutsche Industriebank via a German class-action lawsuit.
The Munich-based law firm Rotter confirmed around two dozen German and other European institutional and private investors have mandated Rotter to start class-action against IKB after the bank refused an out-of-court settlement.
A spokesman for the firm declined to specify which institutions were among the group of investors.
IKB, currently on offer for sale, told investors in July last year it expected a good first quarter and dismissed concerns about the US subprime as unfounded.
Shortly afterwards though, IKB issued a profit warning, and chief executive Stefan Ortseifen resigned.
Before the alert it had forecast annual profits of €280m, while in September IKB said it expected to lose up to €700m.
Media reports stated last week the USD bond insurer Financial Guaranty Insurance Company (FGIC) had also filed a suit of $1.88bn against IKB.
A spokesman for the bank told IPE the organisation declines to comment.
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