Dutch housing co-op Vestia sues Deutsche Bank

Vestia, one of the largest Dutch housing co-operatives, said it had filed a large claim against Deutsche Bank, alleging the bank had improperly sold it interest-rate derivatives.

Vestia said it had filed a claim at the High Court of Justice, in London, on December 2, and would specify later how much it intended to seek in damages.

It alleged Deutsche Bank was responsible for €800m out of €2.5bn in damages suffered by the entire Dutch housing cooperative sector, as a result of mis-sold interest-rate derivatives.

“We dispute the claims and will be defending ourselves in court,” a spokeswoman for the German bank said. Vestia spokesman, Ronald Florisson, said previous attempts to reach an out-of-court settlement had failed.

Vestia was close to bankruptcy in 2012, facing losses on a €23bn pile of derivatives that was supposed to protect the cooperative against a rise in interest rates, but which was later deemed mostly unnecessary, speculative, and out of line with the organisation’s charter.

Vestia survived, with help from several Dutch government and semi-governmental organisations, including the country’s other housing cooperatives, which were forced to contribute to a recovery plan.

Most of the banks that had sold the derivatives agreed, in June, 2012, to a deal to unwind them, and to offer Vestia new financing. Vestia purchased the bulk of its derivatives from ABN Amro and Deutsche Bank, but also from Credit Suisse, Barclays, BNP Paribas, JPMorgan, Nomura and Societe Generale.

In a related case, Credit Suisse successfully sued Vestia, at the High Court, for €83m in unpaid bills resulting from the derivatives. However, in 2015, ABN Amro agreed to pay €55m to settle claims from Vestia.

In 2013, Vestia filed a €1.9bn damages claim against former chief executive, Erik Staal. This year, it settled with Mr Staal, and 10 former board members, for €4.8m, with no admission of wrongdoing. Accountants, KPMG and Deloitte, are still facing unresolved claims.

They deny wrongdoing.

 


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