Freshfields Bruckhaus Deringer said on Thursday that it had reached a settlement with the liquidator of an insolvent bank, who sought €95 million ($105 million) from the Magic Circle firm over advice that allegedly circumvented German tax laws.

The liquidator, Michael Frege, announced at a Maple Bank creditors' meeting on Thursday that he had settled his claim against Freshfields, recovering €50 million ($55.3 million) for creditors, German news outlet Handelsblatt first reported.

"A dispute regarding a potential liability claim stemming from a mandate completed several years ago has been resolved," Freshfields said in a statement. "The parties have agreed after intensive discussions that not only the claim for payment of €95 million, but also additional claims will be withdrawn. We are convinced that our advice always complied with applicable law."

Frege sued Freshfields in April 2019, alleging the firm improperly advised Maple Bank on the legality of so-called "cum-ex" transactions. The transactions, also referred to as dividend stripping or dividend arbitrage, flourished in Germany in part thanks to a loophole in the country's tax code that allowed companies to claim tax refunds on dividend taxes that were never paid.

The loophole was closed in 2012, and the government investigated numerous financial institutions thought to be participating. Among them was Maple Bank's German arm, which collapsed in 2016 after it struggled to pay back taxes it owed.

Neither Frege, an insolvency and corporate restructuring partner at CMS Hasche Sigle in Germany, nor his counsel at Linklaters were immediately available for comment.

Freshfields is represented by Frankfurt-based Arnold & Porter Kaye Scholer partner Michael Weigel.