FRANKFURT German state-owned landesbank lender BayernLB [BAYLB.UL] said Austria would pay it 1.23 billion euros ($1.3 billion) to settle a dispute over Austrian “bad bank” Heta [HAABI.UL].

BayernLB, 75 percent owned by Bavaria, bought a majority in what was then Hypo Alpe Adria for 1.6 billion euros in 2007, only to have it nationalized by Austria two years later after a Balkan expansion spree went awry.

The failure of Hypo, whose assets Heta is winding down, had sparked multiple lawsuits in Austria and Germany with claims and counter-claims amounting to about 16 billion euros.

Earlier this month, Austria’s parliament passed a bill paving the way for the government to reach settlements with the creditors of the defunct Hypo Alpe Adria and remove a millstone from the country’s public finances.

The 1.23 billion euro settlement represents a sum equivalent to 45 percent of Bavaria’s claims against Heta.

(Reporting by Jonathan Gould; Editing by Christoph Steitz)