Austria has filed a lawsuit against BayernLB on the grounds that it believes it was misled by the German lender over the true financial state of the Hypo Alpe Adria bank, which had to be nationalised in 2009.

BayernLB

Austrian Finance Minister Hans Jörg Schelling said the suit filed at the commercial court in Vienna sought €3.5 billion in compensation from BayernLB.

“This is not a day to make jokes,” he told reporters. “We’ve been considering all the alternatives for months. We are committed to the taxpayers.”

He added that the move followed the failure of settlement talks, but he remained open to further negotiations.

Earlier this year Austria introduced a special law that imposed losses on holders of €890 million of Hypo Alpe’s state-guaranteed debt.

The same law also voided €800 million of loans owed to Munich-based BayernLB, which acquired a majority stake in the lender in 2007.

Hypo Alpe was nationalized by the Austrian government in 2009 to save it from collapse, after it took on bad loans in the former Yugoslavia.

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