Breathe a sigh of relief at Linz’s urban politics: The controversial 2007 swap-franc deal, which led to losses for the provincial capital of Upper Austria, will not entail any further costs for the time being after a corresponding ruling from the highest court.
The Supreme Court (OGH) has confirmed the interlocutory judgment of the Vienna Commercial Court on the loss-making barter transaction between the city of Linz and BAWAG. In January 2020, the commercial court declared the contract invalid. “As a result of the ruling, BAWAG will write off its entire claim against the city of Linz, namely 254 million euros,” the bank announced on Monday afternoon.
Value in dispute more than 500 million euros
The write-down will have no impact on BAWAG’s capital distribution plans, as the impact on regulatory capital in previous years has been fully taken into account, according to the Vienna financial institution. “No decision has yet been made on any mutual claims. BAWAG will file claims for damages against the city of Linz in court if no reasonable agreement can be reached.” Year 2013.
“Open Damage Claims”
“Unfortunately, the Supreme Court has ruled that the contract with the city of Linz is invalid,” BAWAG chief executive Anas Abuzaakouk said of the OGH decision. “Now is the time to close this chapter and look to the future.” The verdict on the nullity of the contract now clarifies one aspect of the long-standing legal dispute. “I hope reasonable parties come together to agree on outstanding claims for damages,” said the BAWAG boss.
Dobusch was not authorized
Linz’s then chief financial officer, Werner Penn, had entered into the swap transaction 4175 proxy in 2007. Linz City Council only took a “very general decision” on financial transactions in 2004, according to Commercial Court judge Andreas Pablik in his January 2020 verdict. The then mayor of Linz, Franz Dobusch (SPÖ), was not authorized to authorize Penn for such risky financial transactions. “Cash transactions yes, the swap was not in it,” Pablik said at the time.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
