Meinl Bank sues Atrium for EUR 1.2 bn

The legal conflict between Atrium Real Estate and the company's former owner Meinl Bank accelerated further this week after the Austrian private bank announced it would sue Atrium's new board and management for damages of at least EUR 1.2bn.

The Austrian bank, which is chaired by Julius Meinl V, is accusing Atrium´s management and shareholders, Gazit-Globe and Citi Property Investors, of harming other investors when they cancelled a EUR 300 mln share issue in 2009 and prematurely converted a bond into Atrium shares.

In a press statement, Atrium Real Estate said the action brought by Meinl Bank is ‘entirely without merit’. ‘The company believes that it is nothing more than a desperate response to the EUR 2 bn claim that Atrium brought against Julius Meinl V, Meinl Bank, Peter Weinzierl and other codefendants as announced in August this year.’

According to Atrium, Meinl Bank is attacking in its claim two transactions which had been independently reviewed and approved and which they themselves approved. One of the transactions was approved in writing, Atrium said, and the other was approved by Meinl Bank when it voted in favor of the transaction, which was approved by a 99.98% stockholder vote. According to Bloomberg News, Meinl currently holds less than 1% of Atrium's shares.

‘This action is demonstrative of Meinl Bank's modus operandi as also exemplified by the recent legal actions brought by Meinl Bank against two private Austrian shareholders whose claims against it had been upheld in the Austrian Supreme Court.’

Julius Meinl V is currently under criminal investigation and has been arrested and subsequently released on EUR 100 mln bail for matters pertaining to fraud relating to Atrium’s predecessor company Meinl European Land.

In an analyst’s note, Igor Muller of Prague-based Wood & Company said he believed that the legal suit filed by Meinl Bank was ‘a clear counter-action by Julius Meinl V against the EUR 2.1bn claim by Atrium in August. ‘It is important to note that the takeover of Atrium (then MEL) would never have happened without close cooperation from Meinl Bank, which held the keys to the company through its voting rights to certificates (shares).’

The latest suit was filed in Jersey, where Atrium is officially registered.