LONDON - Deutsche Bank said on Thursday that it would pay more than 775 million euros, or about $1.06 billion, to the heirs of the late media mogul Leo Kirch to settle a long-running dispute over the collapse of his empire.
The settlement resolves more than a decade of litigation between the bank and Mr. Kirch and his family over the downfall of the Kirch Group and its subsidiaries in the largest corporate collapse in Germany since World War II.
“With today’s agreement, we are resolving a well-known and long-standing legacy matter,†said Jürgen Fitschen and Anshu Jain, the Deutsche Bank co-chief executives, in a statement. “In our judgment, this is in the best interests of our stakeholders. We intend to make further progress in this regard, step-by-step, throughout 2014.â€
The Kirch dispute is one of several pieces of legacy issues that Mr. Jain has vowed to resolve this year.
The German lender agreed in December to pay $1.9 billion to settle claims that it had defrauded Fannie Mae and Freddie Mac in the sale of mortgage-backed securities before the United States real estate market collapsed.
European Union antitrust regulators also fined the bank €725 million in December as part of an investigation into the rigging of benchmark interest rates.
In January, Deutsche Bank reported a surprise loss of €965 million in its fourth quarter, reflecting in part €528 million in charges related to lawsuits stemming from prior allegations of misconduct.
The settlement with the Kirch estate is based on a proposal made by the Munich Higher Regional Court in March 2011, the bank said. It provides for a payment of €775 million, plus interest and a lump-sum reimbursement of costs.
The bank said its results would be reduced by €350 million after tax as a result of the settlement and a charge would be reflected in its fourth-quarter 2013 results.
Mr. Kirch sued the bank following an appearance by Rolf E. Breuer, the bank’s former chief executive, on Bloomberg Television in February 2002 in which he commented on the media company’s creditworthiness. The Kirch Group was a client of the bank at that time.
Even though details of the Kirch Group’s problems had been reported in the media prior to Mr. Breuer’s interview, Mr. Kirch claimed that the bank breached confidentiality rules under German law and had tried to damage the company’s reputation.
Later that year, the Kirch Group’s three major subsidiaries declared bankruptcy.
Deutsche Bank has denied the allegations.
At its height in the 1990s, Kirch Group was the second-largest media company in Germany behind Bertelsmann. His media empire included television channels, tens of thousands of movie rights and a stake in Formula One car racing.
Mr. Kirch died in 2011 at the age of 84, but his family had continued to pursue billions of euros in damages from Deutsche Bank.
In December 2012, Deutsche Bank suffered a setback when a German court found the lender liable to pay damages related to the Kirch Group’s collapse. The court didn’t set a damage amount at the time and Deutsche Bank had challenged the decision on appeal.
