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Commerzbank wins more time in banker bonus battle

Published 09/30/2009, 06:57 AM
Updated 09/30/2009, 07:00 AM
CBKG
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* Commerzbank now has until November 2 to file defence

* Commerzbank might seek further extension

* Parallel suit by around 25 other former staff due soon

LONDON, Sept 30 (Reuters) - Commerzbank AG has won a 28-day extension in a multi-million euro legal battle against scores of London-based staff over slashed bonuses, the German bank said on Wednesday.

Commerzbank had been expected to respond in the next few days to a claim by 72 bankers and traders, who allege the bank's failure to pay out more than 33.6 million euros ($49 million) in bonuses constituted a breach of contract and misrepresentation.

One legal source said it was relatively easy to secure an extension of time to file a defence when faced with a very substantial claim, noting that Commerzbank might request a second extension after this one expires on November 2.

The resurgence of banker bonuses, despite the near collapse of the financial system last October that brought banks around the world to their knees and destabilised global economies, has enraged the public and become a political bandwagon.

But the former staff members allege they received a fraction of their agreed 2008 bonuses after Commerzbank bought Dresdner Kleinwort last year and slashed its bonus pot by 90 percent, citing a material adverse change in econonic conditions.

Commerzbank, which was bailed out by the German government and partly nationalised last year, argues the bonuses were discretionary and dependent on financial targets.

The case is one of a number of lawsuits filed against the German bank by angry staff. Another group of around 25 disaffected former employees is expected to file a parallel suit in the next couple of weeks, said legal firm Mishcon de Reya.

The bank has settled or lost separate cases by former senior Dresdner managers over guaranteed bonuses -- and earlier this month called for an end to such payments for investment bankers. (Editing by Rupert Winchester)

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