B.C. P3 banker sued over alleged lack of financial disclosure
Investors are suing the German bank that's financing two hospital projects in British Columbia. Hypo Real Estate clients are alleging that the bank failed to disclose in a timely manner its exposure to the market meltdown this past fall.
The legal action comes on the heels of a raid of Hypo's offices by German prosecutors in an investigation over allegations of suspected market manipulation and breach of trust.
Last month, Hypo received an $85 billion bailout package from the German government and other banks after its Dublin-based unit, Depfa Bank PLC, was starved of the capital it required to meet its commitments because of the credit squeeze.
Depfa is involved in both the Royal Jubilee Hospital expansion and the Surrey Outpatient hospital public-private partnership (P3s) projects.
German law firm Rotter filed suit against Hypo Real Estate (HRXG.DE) on Friday on behalf of clients who allege the bank failed to disclose its exposure to the financial markets crisis in a timely way, Rotter said on Monday.
It said it was representing plaintiffs who bought HRE shares between November 2007 and January 2008 for an average price of 35 euros per share. HRE stock fell sharply after the bank said in mid-January it would have to write down assets as a result of the market turmoil.