German court rules against Kirch

Judge rejects demands for compensation

By ED MEZA

BERLIN -- Leo Kirch suffered a major legal setback on Tuesday after the Munich state court rejected demands by one of his companies for more than e2 billion ($2.7 billion) in compensation from Deutsche Bank in connection with the 2002 collapse of the Kirch media empire.

The new legal decision is something of a surprise as Germany's highest court has already found in Kirch's favor in a similar claim made on behalf of his print division. The court is expected to decide on the amount of damages in that case in May.

Kirch, who once dominated Germany's TV, film and publishing industries, alleges that remarks casting doubts on his conglom's creditworthiness made by Deutsche Bank's former CEO Rolf Breuer caused the insolvency of KirchMedia.

That sparked the fall of his vast Kirch Group as panicked lenders refused to grant further credit, resulting in what was then Germany's biggest financial collapse.

On Tuesday, Judge Brigitte Pecher ruled against Kirch in this new case on a technicality. She maintained that Deutsche Bank represented the print division but did not have a business relationship with Kirch's other business units and was therefore not liable for their collapse.

Some 17 business units are represented by the Kirch Group Litigation Pool that Kirch set up to pursue the cases.

It has not announced whether Kirch will appeal this latest ruling.

Kirch, 82, has made a major comeback as the biggest single shareholder of Constantin Media, a group created by the merger of sports rights giant EM.Sport, Swiss media company Highlight Communications and producer-distrib Constantin Film.