Bankers sue in Britain for 30 million pounds in unpaid bonuses

10th September 2009, Comments 0 comments

The bankers claim that they were paid just 10 percent of bonuses promised to them by Dresdner Kleinwort, their employer, before Commerzbank bought the bank this year.

London -- Seventy-two bankers from Dresdner Kleinwort launched legal action against Commerzbank in Britain Tuesday for 30 million pounds in unpaid bonuses in the wake of the financial crisis.

Current and former staff of Dresdner claimed in London's High Court that they were paid just 10 percent of bonuses promised by the investment bank before it was bought this year by Commerzbank, Germany's second-biggest bank.

Six of the bankers are claiming 1 million pounds (1.13 million euros, 1.64 million dollars) each, while another is seeking 1.46 million pounds. The bankers also want daily interest on the payouts.

The bankers argued that Dresdner set aside 400 million euros (351 million pounds) in guaranteed minimum bonuses last year -- but Commerzbank paid the claimants a fraction of what had been agreed.

Commerzbank cited a "material adverse change" clause to justify the lower payouts after profits were hit by the financial crisis.

But a lawyer for the bankers, Clive Zietman, said the staff had made more than 1 billion euros (877 million pounds) for the bank during the past year.

"I would hope the bank would take a sensible view of English contract law and give the case very serious consideration," Zietman said.

"There is something called the rule of law, and like or not it is what it is," he added.

The court case comes after G20 finance ministers meeting in London last week agreed to take action against bonuses, blamed in part for the financial crisis.

The G20 said they wanted to shift the emphasis from rewarding short-term success, which encouraged risky behaviour, to paying bankers for long-term performance.

Commerzbank -- which is 25 percent owned by the German state and last month reported a sharp second-quarter loss --- has been under political pressure to cut bonuses in the wake of the downturn.

If the bankers fail to reach a settlement with Commerzbank, the case is likely to go to trial next year.

A Commerzbank spokeswoman said: "Dresdner Bank was entitled to take the actions it did. The bank will be defending these claims vigorously."


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