Hedge funds had accused holding company of misleading capital markets
The German Federal Court on Wednesday dismissed an appeal from a group of hedge funds seeking approximately 5.4 billion euros ($6.12 billion) in damages from Porsche Automobil Holding SE over the holding company’s failed 2008 attempt to take over Volkswagen, according to Porsche SE.
The decision is final. Around 40 plaintiffs — most of them U.S. hedge funds — had accused Porsche SE of manipulating capital markets by not accurately disclosing its intentions while gradually building a stake in Volkswagen. The Federal Court’s ruling upheld an earlier rejection of the claims by the Higher Regional Court of Celle, the holding company said.
Porsche SE tried to take over the much-larger Volkswagen but ultimately failed. The plaintiffs alleged that the holding company’s concealment of its true intentions amounted to capital-markets manipulation during the gradual build-up of its Volkswagen stake.
In a statement, Porsche SE said the Federal Court’s decision “is final and it is now established that the plaintiffs have no claim to damages.”
The plaintiffs had appealed an earlier rejection of the damages claims by the Higher Regional Court of Celle. By dismissing the appeal, the Federal Court left the Celle ruling undisturbed, according to Porsche SE.
The litigation turned on whether the holding company’s conduct during the 2008 stake-building amounted to capital-markets manipulation. The Federal Court’s decision to uphold the Celle ruling means the plaintiffs have no valid damages claim against Porsche SE in the German courts.
The claims had sought approximately 5.4 billion euros in damages plus interest, which translated to roughly $6.12 billion.
Porsche Automobil Holding SE is the holding company that built up a stake in Volkswagen. Volkswagen is the much larger of the two companies.