ex-Dresdner Kleinwort traders sue for bonuses
by Gill Montia
Story link: ex-Dresdner Kleinwort traders sue for bonuses
Commerzbank, Germany’s second-biggest lender, is being sued by ex-Dresdner Kleinwort traders who haven’t received their bonuses in full.
According to reports, a group of 72 London-based traders who worked for Dresdner Kleinwort prior to its rescue by Commerzbank last year are seeking a combined £30 million in compensation.
They claim the bank reneged on an agreement to pay guaranteed bonuses made when Dresdner’s owner, insurance giant Allianz, offloaded the investment bank to Commerzbank in a cash and share deal.
Dresdner Kleinwort had been badly hit by writedowns from the US sub-prime mortgage crisis and following the transaction, Commerzbank turned to the German government for a £16 billion injection of cash, in return for a 25% stake in the business.
It is understood that Commerzbank reduced the expected bonus payments by 90%, claiming that it was entitled to make the adjustment, given the deterioration in the performance of Dresdner at the end of last year.
The case has been lodged with the High Court in London and could become the biggest of its kind.