GERMANY - A number of institutional investors seek to reclaim damages of at least €10m from ailing IKB Deutsche Industriebank via a German class-action lawsuit.

The Munich-based law firm Rotter confirmed around two dozen German and other European institutional and private investors have mandated Rotter to start class-action against IKB after the bank refused an out-of-court settlement.

A spokesman for the firm declined to specify which institutions were among the group of investors.

IKB, currently on offer for sale, told investors in July last year it expected a good first quarter and dismissed concerns about the US subprime as unfounded.

Shortly afterwards though, IKB issued a profit warning, and chief executive Stefan Ortseifen resigned.

Before the alert it had forecast annual profits of €280m, while in September IKB said it expected to lose up to €700m.

Media reports stated last week the USD bond insurer Financial Guaranty Insurance Company (FGIC) had also filed a suit of $1.88bn against IKB.

A spokesman for the bank told IPE the organisation declines to comment.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com