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Group Acting For Former East Germany Initiates Claim Against Julius Baer

Tom Burroughes

26 August 2014

A group called Bundesanstalt für vereinigungsbedingte Sonderaufgaben, or BVS, a German authority handling assets of former East Germany, has initiated a legal claim against Switzerland’s Julius Baer for actions of businesses it had acquired nine years ago.  

While the bank noted the case in its half-year report, the filing of the claim by BVS is a new development.

Julius Baer said in a statement it has received payment orders from BVS in the amount of SFr110 million , plus accrued interest. The organisation claims that the former Bank Cantrade, a business which Julius Baer took over via its acquisition of Bank Ehinger & Armand von Ernst from UBS in 2005, allowed unauthorised withdrawals between 1989 and 1992 from the account of a foreign trade company established by former officials of East Germany.

“Against this background, in June 2014, the BVS has initiated further legal proceedings in Zurich,” the statement said.

Julius Baer Bank is contesting the claims, and said it “will take appropriate measures to defend its interests”.

“In addition, the claim has been notified under the 2005 transaction agreement with regard to representations and warranties granted in respect of the acquired entities,” it said.