December 17, 2014 / 11:28 AM / 3 years ago

BayernLB sues Austria for 2.4 bln euros in latest Hypo case

VIENNA, Dec 17 (Reuters) - BayernLB has taken legal action in Vienna to try to recover from the Austrian state 2.4 billion euros ($3 billion) in funding it made to its Hypo Alpe Adria unit before it was nationalised in 2009, the German bank said on Wednesday.

The suit adds another layer to a complex web of litigation over Hypo, whose near-collapse after a decade of unbridled expansion has cost taxpayers in both countries billions of euros.

BayernLB cited contractual provisions that Austria would guarantee the financing package should Hypo be broken up or wound down, a step Vienna implemented this year.

“BayernLB sees itself forced to pursue its claim via the courts and has filed suit against the Republic of Austria for around 2.4 billion euros,” a BayernLB spokesman in Munich said.

A court spokesman confirmed the suit had been filed.

Austria contends the financing to Hypo has to be treated as an equity injection rather than a loan given the dire straits Hypo was in at the time. It is readying its own suit alleging BayernLB misled Austria over Hypo’s condition.

Austria has sued the European Commission in attempt to remove a reference in an EU report approving state aid for BayernLB that an Austrian guarantee of funds at Hypo was a subsidy, which would support a claim on Austria by BayernLB. ($1 = 0.8021 euros) (Reporting by Michael Shields and Angelika Gruber; editing by Keith Weir)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below