Karstadt to absorb Jewish damage claim

14th December 2004, Comments 0 comments

14 December 2004 , ESSEN - Ailing German retail group KarstadtQuelle said on Tuesday that its financial stability would not be jeopardised by the EUR 145 million damage claim being sought by the Jewish Claims Conference (JCC). "The financial stability of the company is guaranteed," company spokesman Joerg Howe said at KarstadtQuelle headquarters in Essen, while also calling the capitalisation increase undertaken to help revamp the company a "big success". The comments came while KarstadtQuelle shares were

14 December 2004

ESSEN - Ailing German retail group KarstadtQuelle said on Tuesday that its financial stability would not be jeopardised by the EUR 145 million damage claim being sought by the Jewish Claims Conference (JCC).

"The financial stability of the company is guaranteed," company spokesman Joerg Howe said at KarstadtQuelle headquarters in Essen, while also calling the capitalisation increase undertaken to help revamp the company a "big success".

The comments came while KarstadtQuelle shares were falling some 8 percent on stock markets as investors absorbed the news about the JCC damage claims.

In Frankfurt, JCC lawyer Stefan Minden assured that his organisation did not aim to drive KarstadtQuelle into insolvency with its damage claims.

"KarstadtQuelle must now decide whether it is ready to talk or not," Minden said. He said the JCC would seek to resolve the issue in negotiations.

He said the JCC would seek an out-of-court settlement so as to avoid a legal battle which might otherwise drag on for years.

But KarstadtQuelle spokesman Howe said that the company expected there would be long legal proceedings to clarify the claims suit, so that there would be no financial burdens in the "short run".

The JCC, which represents Jewish interests seeking compensation for properties lost under the Nazi German regime, announced the size of its claims on Monday after the JCC last week had won a court battle before Germany's Federal Administrative Tribunal.

KarstadtQuelle, which sells by mail order and through department stores Germany-wide, is currently raising EUR 535 million in fresh equity from shareholders and EUR 1.75 billion from banks in a battle to stave off collapse.

It closed the order book for new shares on Monday. As of noontime on Tuesday, KarstadtQuelle shares had lost some 8 percent, to EUR 6.39. One broker said the company "simply cannot afford" the JCC damage claim.

The JCC claim arises from the company's earlier ownership of one of the most valuable plots of downtown Berlin, where the Beisheim complex with its offices, shops and hotel stands alongside Potsdamer Platz.

Starting out with the forced sale of the Jewish-owned department store Wertheim on the site at an artificially low price in the Nazi period, the JCC has built up a case that it should receive a share of the proceeds from the 1990s later sale of the property.

DPA

Subject: German news

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