On this Tuesday morning, the parties to the dispute met in the third round in front of the Special Senate for Investor Model Proceedings (KapMuG) at the Frankfurt Higher Regional Court.

On the one hand there is Deutsche Telekom AG, which has been fighting for compensation with thousands of small investors from all over Germany, many of them very old, for 20 years now.

On the other hand, the heirs of the model plaintiff, who died years ago.

The final steps in the process are now being completed by his lawyer Peter Gundermann from the Tilp law firm.

His law firm partner Andreas Tilp, for many observers the defining figure in the largest investor protection lawsuit in Germany, had a fatal accident this spring.

Marcus Jung

Editor in business.

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So "Mr.

KapMuG “is no longer involved in how his partner colleagues, other investor representatives and the Telekom lawyers negotiated a compromise over several months, which has now been approved by the Frankfurt Higher Regional Court.

"You have done very good preparatory work and we support the proposal," said Bernhard Seyderhelm, chairman of the 23rd civil senate in Frankfurt.

The chairman "urgently" advised the approximately 17,000 small shareholders who were suing for a signal in the model lawsuit to accept the offer.

The community of heirs of the model plaintiff had signaled that they would also agree to the proposal in the coming days, said lawyer Gundermann.

Very favorable offer to claimants

The result of the negotiation, which both sides described as appropriate and practicable, provides the following solution. Shareholders can benefit if they meet the following requirements: They must have bought their share certificates between May 27, 2000 and December 19, 2000. The claims must not be statute-barred. And the claimants must still own the claim. In the questions of the statute of limitations, which mainly concerns lawsuits after May 27, 2003, Telekom makes concessions if the plaintiffs can provide relevant evidence. In addition, in cases of doubt in the thousands of pending lawsuits, an arbitration board in Hamburg is to be called in. If the original claimant has died, the heirs must also provide evidence.Anyone who has sold their shares in the meantime and is still suing should also receive an offer.

The higher regional court in Frankfurt published his condition last week. Plaintiffs will be refunded the full original purchase cost, including incidental acquisition costs. The shares remain in the possession of the small shareholder, for which Telekom sets a share price of 16.50 euros. Shareholders must have dividend payments already made offset against their entitlement. Anyone who has resold their shares in the meantime should receive the difference between the purchase costs minus the resale proceeds and dividends received. Plaintiffs who meet these requirements are expected to receive an offer by June 30, 2022.

Two new details which were very attractive to the plaintiffs became known during the course of the discussion. Telekom reimburses you 70 percent of the litigation interest accruing up to the end of 2021. Since some lawsuits have been pending for 20 years, this should make up a larger item. In advance, the various investor representatives had given the total amount of their claims at around 200 million euros. If the model plaintiff withdraws his lawsuit and both sides do not submit any claims for costs, Telekom will pay the entire court and lawyer fees, this also applies to the individual lawsuits.

“The process has been going on for 20 years and it would continue to run for ten years.

Now is the time to make this very fair offer, ”said Claudia Junker, chief lawyer at Telekom after the negotiation.

The long-standing legal representative of the group, Bernd-Wilhelm Schmitz, added: "We are pleased that the court has expressly welcomed the settlement proposal and recommended all investors to accept the offer."

Legal security for the federal government

In addition, the comparison also gives the summoned parties legal certainty. Claims against former board members of Telekom, against the federal government and KfW as well as against Deutsche Bank, Commerzbank and Goldman Sachs are excluded by the agreement. Telekom will get in touch with the lawyers of all suing private investors as soon as possible. By June 30, 2022, every plaintiff who meets the requirements should receive an offer. If the small shareholders or their heirs agree in writing, they should receive the money within 30 days.

After Telekom went public for the third time in 2000, when shares were issued at a price of EUR 66.50, the share price fell sharply. From 2001 onwards, thousands of small shareholders went to court against the group, the federal government, KfW and the syndicate banks. Because in the prospectus the share transfer of Sprint Inc. in the USA to a Telekom subsidiary was marked as a sale. This transaction was actually just a "reassignment" and thus incorrectly reported in the prospectus. The Federal Court of Justice confirmed this serious error years later. Because the original order for reference by the Frankfurt Regional Court dates from 2006 and the original law for model proceedings still applies to the Telekom proceedings, the parties had to come to Frankfurt again for a hearing.