A German court has dismissed a lawsuit by hedge funds seeking EUR1.36bn (GBP1.14bn) in damages from investment company Porsche SE.
It was a ruling that bodes ill for other claimants pushing damages claims against Porsche, Reuters reported.
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Two dozen hedge funds including Viking Global Investors, Glenhill Capital and Greenlight Capital had accused Porsche SE of throughout 2008 camouflaging its plan to acquire much-larger Volkswagen AG and secretly piling up a holding in its target.
In March 2008 Porsche SE dismissed talk that it intended to take over VW but seven months later revealed it controlled 74.1% of VW’s common stock, just short of the 75% takeover threshold.
Porsche’s statement caused VW shares to surge to record highs as short sellers scrambled to cover their positions, Reuters said.
Judge Carola Wittig at the regional court in Stuttgart – where Porsche is based – said it could not be proved that Porsche SE deliberately caused harm to hedge funds’ position.
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By GlobalDataThe holding company, whose sole asset is VW shares, still faces over EUR4bn in additional damage claims through a number of investor lawsuits pending at German courts in Hanover and Braunschweig, the news agency noted.
Porsche SE hailed the ruling.
“Porsche SE welcomes the Regional Court of Stuttgart’s decision and considers its legal opinion to have been confirmed,” the company said in an emailed statement.
“In September 2012, the Regional Court of Braunschweig had already dismissed two claims for damages against Porsche SE. Those two decisions are final and” legally binding.”
“The verdict confirms our view that lawsuits pending in Hanover and Braunschweig are equally unfounded,” a Porsche spokesman told Reuters.
The VW AG – Porsche SE merger was finally completed on 1 August, 2012.
