Deutsche Bank can sue Madoff feeder funds over $1.6 billion claims sale

NEW YORK (Reuters) – A U.S. judge said on Friday Deutsche Bank AG may sue two offshore funds for allegedly reneging on an agreement to sell the German bank $1.6 billion of claims in the bankruptcy of swindler Bernard Madoff’s namesake firm.

Deutsche Bank had accused the Kingate Global Fund and Kingate Euro Fund, which funneled client money to Madoff before his Ponzi scheme collapsed in 2008, of having “sellers’ remorse” for agreeing to sell the claims at 66 cents on the dollar in 2011, only to see their value later rise substantially.

In refusing to dismiss the lawsuit, U.S. District Judge Edgardo Ramos in Manhattan pointed to language that the agreement was “firm, irrevocable and binding,” though a formal contract was never signed and much time had passed.

“Here, two sophisticated parties agreed of their own free will to be bound,” Ramos wrote.

Ramos said Deutsche Bank can also pursue a claim that the Kingate funds acted in bad faith by filing for protection under Chapter 15 of the U.S. bankruptcy code in September 2019 to escape possible litigation by the bank.

Lawyers for the Kingate funds did not immediately respond to requests for comment. A spokesman for Deutsche Bank declined to comment.

In June 2019, the Kingate funds agreed to return $860 million in a settlement with Irving Picard, the court-appointed trustee liquidating Madoff’s former firm, Bernard L. Madoff Investment Securities LLC.

Madoff, 82, is serving a 150-year prison term.

The case is Deutsche Bank Securities Inc v. Kingate Global Fund Ltd et al, U.S. District Court, Southern District of New York, No. 19-10823.

Deutsche Bank CEO willing to give up investment bank oversight role – source

FRANKFURT (Reuters) – Christian Sewing, chief executive officer of Deutsche Bank, is willing to give up his role overseeing the investment bank in the foreseeable future, a person with knowledge of the matter said on Friday.

The person, speaking on condition of anonymity, said Sewing never intended to permanently keep the job that he added to his duties in an overhaul in 2019.

Sewing has come under pressure from regulators to relinquish day-to-day oversight of its sprawling investment bank, Reuters reported in January.

Handelsblatt earlier on Friday reported that there is movement on the topic of the dual role.

Deutsche Bank swings to net profit in 2020, its first since 2014

Deutsche Bank swung to a small annual profit in 2020, its first since 2014, on the back of strong gains at its investment banking division, the German lender said on Thursday.

The net profit attributable to shareholders of 113 million euros ($135.69 million) compares with a 2019 loss of 5.7 billion euros. Analysts had expected a loss of around 300 million euros for 2020.

The return to profit is a victory for Chief Executive Christian Sewing, who was promoted in 2018 to turn around Germany’s largest lender after years of losses and steep fines for money laundering and its role in the mortgage crisis.

Over the past 10 years, Deutsche has lost a total 8.2 billion euros. Analysts believe the bank is set to post another profit in 2021, according to a consensus forecast.

“We have built firm foundations for sustainable profitability, and are confident that this overall positive trend will continue in 2021, despite these challenging times,” Sewing said.

Deutsche Bank, like its competitors, experienced a trading boom because of market volatility linked to the pandemic. That elevated the investment bank to its profit engine last year.

Revenue at the division rose 32% to 9.28 billion in 2020, while revenue from its key fixed-income and currency sales and trading business climbed 28%.