Metallgesellschaft AG sues former executives.NEW YORK--(BUSINESS WIRE)--Feb. 6, 1995--Attached is an English translation of a German press release issued Friday, February 3 from Frankfurt.
The release announced that Metallgesellschaft AG (MGAG) has brought suit against former CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Heinz Schimmelbusch and former CEO Meinhard Forster in District Court in Frankfurt am Main, Germany.
The suit charges the two former executives with breach of duty and other infractions. In the suit the company seeks DM 25 million from Dr. Schimmelbusch, and DM 2 million from Dr. Forster.
The suit followed by one week the release of a special auditor's report Auditor's Report
Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes referred to as the clean opinion.
Most auditor's reports consist of three paragraphs. on the oil trading losses The following contains a list of trading losses which eventually forced major corporations to go bankrupt or restructure parts of their organisation. This list is not exhaustive. sustained by MGAG and its subsidiaries in late 1993.
An English translation of the special auditor's report is available upon request. (It is about 200 pages.) We expect to have an English translation of key portions of the lawsuit in several days.
If you wish to receive the special auditor's report or any other information, or have any questions, please call Clark & Weinstock.
CONTACT: Clark & Weinstock, New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
Fred Garcia, Gene Donati, or Maria Gonzalez,
Metallgesellschaft AG Brings Charges Against Former Executive Board Members Dr. Schimmelbusch and Dr. Forster
FRANKFURT AM MAIN, Germany--Feb. 3, 1995--Metallgesellschaft brought today an action for damages against its former Executive Board Chairman, Dr. Heinz Schimmelbusch, and its former Chief Financial Officer, Dr. Meinhard Forster, in the District Court of Frankfurt am Main, Germany.
The action focuses on the most flagrant fla·grant
1. Conspicuously bad, offensive, or reprehensible: a flagrant miscarriage of justice; flagrant cases of wrongdoing at the highest levels of government. See Usage Note at blatant.
2. violations of duty of the two defendants. These relate to their irresponsible conduct and breaches of their legal duties in connection with high-risk oil transactions in the U.S. and losses resulting from the involvement of the American subsidiaries of Metallgesellschaft AG with Castle Energy Corp.
Dr. Schimmelbusch and Dr. Forster allowed a hazardous expansion of the U.S. oil business to occur which created the risk - and, ultimately, the reality - of losses that threatened the very existence of the Metallgesellschaft AG group.
Beginning in 1989, Metallgesellschaft AG's U.S. subsidiaries also entered into a complicated series of contracts with the Castle Energy group which proved to be a disastrous investment. Instead of terminating this involvement as soon as it became clear it was a mistake, Schimmelbusch and Forster permitted offtake Off´take`
n. 1. Act of taking off; specif., the taking off or purchase of goods.
2. Something taken off; a deduction.
3. A channel for taking away air or water; also, the point of beginning of such a channel; a take-off. agreements to be concluded which unilaterally u·ni·lat·er·al
1. Of, on, relating to, involving, or affecting only one side: "a unilateral advantage in defense" New Republic.
2. subsidized sub·si·dize
tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es
1. To assist or support with a subsidy.
2. To secure the assistance of by granting a subsidy. the Castle Energy group at the expense of the American subsidiaries of Metallgesellschaft AG.
Dr. Schimmelbusch and Dr. Forster are legally responsible for all this. They committed gross violations of their legal duties by permitting the irresponsible oil transactions and the one-sided relationship with Castle which together brought Metallgesellschaft to the point of near ruin.
The irresponsible oil transactions led to losses of more than DM 1.6 billion - an amount which exceeded the available resources of even a world-class group like Metallgesellschaft - while the involvement with Castle had a negative impact of some DM 1.1 billion.
Dr. Schimmelbusch caused additional losses to Metallgesellschaft AG by the unauthorized purchase and renovation of a house in Frankfurt, which was intended in part for his personal use, and by the renovation of his private apartment in New York at the expense of Metallgesellschaft Corporation. Moreover, Dr. Schimmelbusch violated vi·o·late
tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates
1. To break or disregard (a law or promise, for example).
2. To assault (a person) sexually.
3. his legal duties by taking stock options for the acquisition of 600,000 shares of Methanex Corp., a company in which Metallgesellschaft was investing, without informing the Supervisory Board Supervisory board
The board of directors that represents stakeholders in the governance of the corporation. and obtaining its approval.
Metallgesellschaft AG is initially claiming DM 25 million in damages from Dr. Schimmelbusch and DM 2 million from Dr. Forster. While at present only a small part of the total amount of the losses caused by the defendants' irresponsible and unlawful behavior is being claimed for, the Company reserves the right to assert further claims at a later time.
CONTACT: Metallgesellschaft AG
Lutz E. Dreesbach, (4969) 159-3435
or Andreas Martin Andreas Martin is a lutenist who was born in Frankfurt am Main in Germany.
He studied guitar with Mario Sicca (Musikhochschule Stuttgart) and Ruggero Chiesa (Conservatorio di Musica Giuseppe Verdi), as well as Anglo–Saxon and Romance Languages and Philosophy at the , (4969) 159-3732
CONTACT: Clark & Weinstock, New York
Fred Garcia, Gene Donati, or Maria Gonzalez,