Commerzbank bonus breach appeal refused
GERMAN lender Commerzbank came under fresh attack from a High Court judge yesterday as it failed to win the right to appeal against an order to pay out €52m (£41.6m) in bonuses to its former City staff.
Mr Justice Owen slapped an interest charge on the unpaid bonuses for 2008 – cut during the financial crisis – and criticised the “highly reprehensible” manner in which Commerzbank sacrificed the contractual rights of employees “on the altar of public perception”.
He rejected the bank’s request to appeal after 104 ex-investment bankers at Dresdner Kleinwort, which it acquired in 2009, won their claim earlier this month.
Now Commerzbank, which has spent two-and-a-half years fighting the payouts, will consider whether to apply directly to the Court of Appeal.
If it decides against another attempt it will be ordered to make a prompt payment of £5.3m to the bankers to cover half of their expected legal bill.
It will also pay most of the bankers, whose claims range from around €15,000 to €2.6m, interest on their damages at a rate of five per cent above base rate. Twenty one bankers, whose offer to settle was rejected in 2010, will get an interest rate of 10 per cent from March 2010.
Commerzbank said the interest charges and costs would bump up the cost of the claim to about €70m.
It has argued the Dresdner subsidiary was justified in cutting bonuses as losses hit €6.5bn and threatened the survival of the business.