European court to assess whether Germany violated rules in Hypo Real Estate nationalization

European court to examine HRE nationalization

MUNICH — German judges are asking a European court to assess whether the government violated a European Union directive while nationalizing troubled bank Hypo Real Estate Holding AG.

The Munich state court found Thursday that last year’s nationalization did not itself violate German laws. Judge Helmut Krenek, ruling on a complaint by former shareholders, made clear that it won’t be reversed.

However, the court asked the European Court of Justice to decide whether Germany violated an EU directive by not issuing formal invitations 21 days ahead of an extraordinary general meeting last June.

That increased the government’s holding to 90 percent via a capital increase.

A ruling against Germany could open the way for ex-shareholders to claim compensation.