Investor suit hinges on meaning of Deutsche Bank chief's word

U.S. jury must define `ubernahmegesprache'

February 08, 2002|By BLOOMBERG NEWS

NEW YORK - Deutsche Bank AG lost a bid to dismiss a lawsuit alleging that Chief Executive Officer Rolf-E. Breuer misled investors in a comment he made to a German reporter about a takeover of Bankers Trust Corp.

The case centers on an interview Breuer gave to a reporter for the German news weekly Der Spiegel on Oct. 22, 1998, when he was asked, in German, whether Deutsche Bank had engaged in takeover talks with Bankers Trust, which then was the parent of Baltimore investment brokerage Alex. Brown & Sons Inc.

Deutsche Bank announced its acquisition of Bankers Trust in November 1998.

Investors claim they lost money because of Breuer's comments, which falsely suggested that no talks had occurred, the plaintiffs allege. The parties disagree on the English translation of an 18-letter German phrase. In a 29-page opinion, U.S. District Judge John Koeltl allowed the case to proceed, observing that the plaintiffs may have been misled.

"It cannot be found as a matter of genuinely undisputed fact that Breuer's statement was accurate," Koeltl said.

On the first trading day after publication of the Der Spiegel interview, the price of Bankers Trust stock fell about 6 percent, Koeltl said in his opinion.

By the time of the interview, there'd been several contacts between Bankers Trust and Deutsche Bank, Koeltl said. The first occurred in July 1998.

Between July and October, Deutsche Bank had prepared documents analyzing the prospect of merging with Bankers Trust and had discussed "possible acquisitions" with its adviser, Goldman Sachs Group LP, the judge said.

In the lawsuit, both sides agree that Breuer was asked if he'd had talks with "the Americans," referring to Bankers Trust. They disagree on the response.

Deutsche Bank argues that a German phrase used by Breuer, ubernahmegesprache, refers to "formal and structured talks" between companies, which, the bank says, hadn't yet occurred. The plaintiffs say the phrase encompasses even exploratory talks, which had occurred.

Koeltl said the correct translation of ubernahmegesprache must be decided by a jury.

A spokesman for the Frankfurt-based bank declined to comment.

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