BLBG : Commerzbank Sued for $49 Million Over Banker Bonuses
Sept. 9 (Bloomberg) -- Seventy-two former Dresdner Kleinwort bankers sued Commerzbank AG for 34 million euros ($49 million) in the latest of more than a dozen cases over unpaid bonuses in London and Frankfurt.
The former bankers at Dresdner Kleinwort, the German investment bank that was taken over by Commerzbank in January, filed the lawsuit in London’s High Court yesterday. The suit claims the bankers, some of whom still work for Frankfurt-based Commerzbank, were paid a 10th of the amount they’re owed in bonuses under a contract with Dresdner Kleinwort.
Commerzbank, which has tapped Germany for 18.2 billion euros of capital, withheld bonuses and severance pay for Dresdner executives after taking control of Dresdner Kleinwort. The bank has already lost four London lawsuits over the issue and settled several others.
“Dresdner Bank was fully entitled to take the actions it did in relation to Dresdner Kleinwort employees’ discretionary bonuses in light of the marked deterioration in the investment bank’s performance in the months of November and December 2008,” Commerzbank said in an e-mailed statement. “The bank will be defending these claims vigorously in the courts.”
Eight of the bankers claim to be owed more than one million euros, according to the lawsuit. The largest individual claim was by Jonathan Powell, seeking 1.67 million euros.
Previous Suits
Former Dresdner Kleinwort executive committee members John McIntyre, Bertrand Pinel and Alberto Piedra sought combined payments of about 11 million euros from Commerzbank in separate lawsuits filed in London.
Commerzbank in February asked investment bankers at Dresdner Kleinwort to voluntarily give up bonuses guaranteed by their contracts after it eliminated variable pay for other employees. Allianz SE, the insurer that agreed to sell Dresdner Bank to Commerzbank, had earmarked about 400 million euros for bonuses at Dresdner, including money to keep employees from leaving the bank.
The brand Dresdner Kleinwort, which traces its name back 223 years to a trade financier, ceased to exist on Sept. 1 as part of the integration into Commerzbank. Commerzbank Chief Executive Officer Martin Blessing has pledged to cut the size of the combined investment bank by about half to 1,500 employees after Dresdner Kleinwort had a loss of 6.3 billion euros last year.
