Shareholders at Germany's IKB say they will sue the bank for not informing investors early enough about possible consequences from the US subprime loan crisis on the company's business. The move comes after a failure to reach an out-of-court settlement.

A Munich-based attorney named Klaus Rotter, saying he represents dozens of institutional and private investors, said the case will be filed by July at the latest, according to the newspaper Börsen Zeitung.

When it released its July 2007 results, the bank said concerns about the US subprime mortgage crisis were unfounded, and predicted a profit for the year. Only a few weeks later, officials at the Düsseldorf bank were forced to admit that they had lost hundreds of millions of euros that had been speculated on the US real estate market. The bank could only be saved through an injection of funds from a handful of Germany's biggest banks. A buyer is currently being sought for the beleaguered IKB.

Rotter said he believed his case would be strengthened by a recent ruling by the German Federal Court of Justice requiring that publicly listed companies not only report "almost certain" results, but also results that are "sufficiently probable." "The federal court decision will make it easier for my clients to claim damages against IKB," said Rotter.

But IKB is far from alone in its problems. SPIEGEL has learned from sources that a number of German state banks may soon report losses in the hundreds of millions for the first quarter. The reason: the price and value of securitized assets that had been used by the companies to shore up their balance sheets fell by 90 percent during the first two months of 2008. They are continuing to fall.

On Dec. 31, 2007, HSH Nordbank had a bad debt provision of €600 million ($946.3 million), but by the end of February, it had an additional €500 million on the books. And at BayernLB, risks of €1.9 billlion euros on Dec. 31 have increased in the first quarter by more than €1 billion more. Indeed, the losses could become an issue during upcoming state elections in Bavaria, where state Finance Minister Erwin Huber has called for figures to be reported quarterly in the future. Meanwhile, in the state of North Rhine-Westphalia, state Finance Minister Helmut Linssen is concerned about risks totalling €600 million to €800 million.

In the meantime, disquiet is growing in the state government over the actions of North Rhine-Westphalia's former minister of European Affairs, Michael Breuer, who today heads the federal association of state savings banks and is the head of the board of directors of WestLB. High-ranking government officials are concerned that the state-owned Sparkassen savings banks have no interest in saving WestLB and that they want to merge the institute with Landesbank Baden-Württemberg in a fire sale.

dsl/spiegel