A German oil refinery
German metalworking conglomerate Metallgesellschaft AG gambled hard and fell even harder. In 1993 the company lost $1.3 billion after speculating that oil prices would rise. Oil plummeted, however, forcing shareholders to hastily put together a $2 billion rescue package to keep the company from going under bankruptcy.
CEO Heinz C. Schimmelbusch, widely respected as a financial wunderkind, was quickly ousted along with most of Metallgesellschaft’s senior management. The company sued Schimmelbusch in the U.S. and Germany, accusing him of breach of duty in the trading losses. The ex-CEO filed a $10 million countersuit in New York Supreme Court against the current management and Deutsche Bank, Germany’s biggest financial institution, claiming the bank used the company’s misfortunes to profit financially and brought it to the brink of bankruptcy. (The two sides eventually settled.)
Metallgesellschaft AG returned to profit in 1996 and is now part of GEA group.