By: Rechtsanwalt (Attorney) Carsten Lexa, LL.M.
A group of 72 former Dresdner Kleinwort traders have sued the new owner of Dresdner Bank AG, Commerzbank AG, claiming it reneged around 34 million Euros of guaranteed bonus payments.
The traders argued that their bonusses were guaranteed before Commerzbank Bank´s 5 billion Euros takeover of Dresdner Bank and should not be affected by subsequent losses.
Commerzbank, however, reduced the bonusses by 90%. It claimed the global financial crises allowed the bank to invoke a so-called „Material Adverse Claim“ clause. Such clause would provide the legal right to reduce the bonusses (a material adverse claim might be promising if business circumstances have changed in a dramatically uncomfortable way).
The traders would have a point if they could prove that a contractual guarantee was indeed given by Dresdner Bank and that such guarantee irrevocable. However, in December 2008, the traders received a standardised announcement that mentioned „preliminary bonus payments“. The announcement contained terms like „arbitrary“, „provisional“, „liable to review“ and „to reserve the right to reduce“.
These terms do not sound like an irrevocable guarantee. It will be interesting to see the outcome of this legal battle and to read the grounds for the judgement. However, it is in question whether this dispute will end with a court decision – it is more like that the parties will end with a settlement.
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