ALLIANZ GROUP 164 In December 2001 the European Commission commenced a pre- liminary investigation against several insurance companies operating in London, including a subsidiary of Allianz AG, in connection with al- leged anticompetitive behavior related to aviation war risk insurance in the London market. It is currently not possible to predict the out- come of this proceeding.  On November 5, 2001, a lawsuit, Silverstein v. Swiss Re Interna- tional Business Insurance Company Ltd., was filed in the United States District Court for the Southern District of New York against certain in- surers and reinsurers, including a subsidiary of Allianz AG which is now named Allianz Global Risks U.S. Insurance Co. The complaint seeks a determination that the terrorist attack of September 11, 2001 on the World Trade Center constituted two separate occurrences un- der the alleged terms of various coverages. Allianz Global Risks U.S. Insurance Co. has also filed a suit against Silverstein on January 2, 2002, in connection with the coverage issues arising from the Sep- tember 11, 2001 attack on the World Trade Center.This suit and other related suits have been consolidated for discovery and other pur- poses. On January 30, 2003, the court rejected a motion for assess- ment by Allianz Global Risks U.S. Insurance Co. and referred this is- sue to the jury. Based on the policy wording of the respective insur- ance contract, management believes that Silverstein’s claims will not succeed as far as they are based on the theory of 2 occurrences. In connection with the terrorist attack of September 11, 2001 Allianz Group recorded net claims expense of approximately  ¤ 1.5 bn in 2001 for the Allianz Group on the basis of one occurrence. In the event that liability is premised under a two occurrence theory, Allianz AG estimates that the Allianz Group may have an additional net expo- sure of approximately  ¤ 200 mn. On December 19, 2002, the insolvency administrator of Kirch  Media GmbH & Co. KGaA (“KirchMedia”) made a formal demand on Dresdner Bank to return a pledged shareholding to the insolvency assets (Insolvenzmasse) or to make payments to the insolvency as- sets to compensate for the loss of the shareholding. The sharehold- ing, a 25 % stake in the Spanish television group Telecinco, had been pledged by subsidiaries of KirchMedia to Dresdner Bank as collateral for a loan of  ¤ 500 mn from Dresdner Bank to KirchMedia’s holding company, TaurusHolding GmbH & Co. KG (or TaurusHolding). Fol- lowing TaurusHolding’s default on the loan in April 2002 and insol- vency in June 2002, Dresdner Bank enforced its security interest and acquired through a subsidiary the Telecinco shareholding in a forced auction sale. The insolvency administrator contends that the pledge was created under circumstances that cause it to be invalid or void and may initiate legal action against Dresdner Bank. The manage- ment of Dresdner Bank believes that there is no valid basis for the in- solvency administrator’s demand. On May 24, 2002, pursuant to a statutory squeeze-out procedure, the general meeting of Dresdner Bank AG resolved to transfer shares from its minority shareholders to Allianz AG as principal shareholder The U.S. Securities and Exchange Commission and the State of New Jersey have made allegations against Allianz Dresdner Asset Management of America L.P. and some of its subsidiaries (the “ADAM of America companies”) in relation to purported tolerance of market timing. Market timing is the repeated buying and selling of partici- pations in funds to benefit from movements and as such it is not il- legal, unless it violates the boundaries laid down in the respective fund prospectus. The State of New Jersey has filed a complaint with the Superior Court of New Jersey on February 17, 2004 relating thereto. With similar reproaches in relation to market timing, certain private investors have initiated claims for damages against ADAM of America companies and filed motions for class action certification. The outcome of the proceedings can not be predicted at this stage. Another investor has filed a claim in the United States District Court, District of Connecticut, against various ADAM of America companies, among others in relation to the utilization of securities commissions for the distribution of funds and has requested compensation for damages. He has also filed a motion for certification as class action. The outcome of this proceeding cannot be predicted at this stage. in return for payment of a cash settlement amounting to  ¤ 51.50 per share. The amount of the cash settlement was established by Allianz AG on the basis of an expert opinio, and its adequacy was confirmed by a court-appointed auditor. Some of the former minority share- holders applied for a court review of the appropriate amount of the cash settlement in a mediation procedure (Spruchverfahren), which is pending with the district court (Landgericht) of Frankfurt. Allianz AG believes that a claim to increase the cash settlement does not exist. In the event that the court were to determine a higher amount as an appropriate cash settlement, this would affect all approximately 16 mn shares which were transferred to Allianz AG.