Volkswagen Will Not Seek Damages From Former Exec

FRANKFURT July 9, 2006; Reuters reported that Volkswagen AG will not seek to recover damages from its former personnel chief Peter Hartz, Focus magazine said in a report.

Allegations of kickbacks, slush funds and sex-for-favors at VW made the front pages in Germany last summer and led to the resignations of Hartz and Klaus Volkert, head of VW's powerful works council.

German prosecutors are investigating for possible fraud and breach of trust.

Focus said, however, that it was not clear if the carmaker's supervisory board would approve the settlement with the insurers. It cited a supervisory board member.

"After reaching a deal with the insurance company, Volkswagen wants to do without a previously planned damages suit against Hartz," the magazine said in an advance copy of a story due for publication on Monday.

A spokesman at VW, Europe's biggest carmaker, declined to comment on the report.

Focus said that after weeks of negotiations with VW, an international insurance group agreed to pay around 4.5 million euros ($5.8 million) under a so-called Directors & Officers (D&O) liability insurance policy, which covered Hartz.

The magazine or Reuters did not name the insurance group.