Heinz Schimmelbusch was the Chief Executive of Metallgesellschaft

Metallgesellschaft

Metallgesellschaft AG was formerly one of Germany's largest industrial conglomerates based in Frankfurt. It had over 20,000 employees and revenues in excess of 10 billion US dollars...

 AG, a German industrial conglomerate, that almost went bankrupt after losing an estimated $1.3 billion on speculative bets in oil futures markets.

Background and education

Schimmelbusch was born in Vienna

Vienna

Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...

. He received a doctorate in Economics from the University of Tübingen, Germany.

Metallgesellschaft

Under the leadership of CEO Schimmelbusch, Metallgesellschaft entered the oil business by selling fuel to customers (such as gasoline stations) via its American subsidiary, MG Refining and Marketing in the form of fixed price long term contracts (up to 10 years). Metallgesellschaft attempted to hedge its exposure to rising oil prices on the futures market. Unfortunately, in 1993, oil prices began to drop and Metallgesellschaft's derivatives strategy turned into extensive paper losses. The company's largest shareholder, Deutsche Bank

Deutsche Bank

Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...

found out and responded by ousting Schimmelbusch and liquidating Metallgesellschaft's positions which turned the virtual losses into real losses.