Some former Dresdner employees have incorporated an interesting twist on the class action lawsuit concept. A total of 72 bankers are joining together and going after Commerzbank for close to $50 million they claim they are still owed, with interest, after getting only ten cents on every bonus dollar due to them after the new guard took over.
Commerzbank, which has tapped Germany for 18.2 billion euros of capital, withheld bonuses and severance pay for Dresdner executives after taking control of Dresdner Kleinwort in January. More than a dozen lawsuits have been filed against the bank in London and Frankfurt over unpaid bonus and severance.
"Dresdner Bank was fully entitled to take the actions it did in relation to Dresdner Kleinwort employees' discretionary bonuses in light of the marked deterioration in the investment bank's performance in the months of November and December 2008," Commerzbank said in an e-mailed statement. "The bank will be defending these claims vigorously in the courts."
But the potential damage to Dresdner Commerzbank undoubtedly goes well beyond $50 million or so. Once shareholders learn the bank paid even 10% of these bonuses, Commerzbank, in sort of a lawsuit-squared structure, may find itself being sued for what it's being sued for.
Commerzbank Sued for $49 Million by 72 Bankers Over Bonuses [Bloomberg]