Sunday, 31 July 2016
Last updated 1 day ago
Aug 10 2012 | 2:09pm ET
A New York state judge has given the green light to a $1.4 billion lawsuit against Porsche SE filed by more than two dozen hedge funds.
The hedge funds allege that Porsche manipulated the market in Volkswagen shares, secretly acquiring a majority stake in its fellow car company before announcing plans to acquire VW. That plan never came to fruition, thanks in part to the hedge fund lawsuits, and VW in turn purchased Porsche's sports-car franchise, but it all amounts to unjust enrichment anyway, the hedge funds say.
The state court ruling comes more than a year after a federal court junked a hedge fund lawsuit against Porsche, ruling that it had no jurisdiction because VW shares trade on a German exchange.
Porsche continued to press that case even after the New York judge refused to dismiss the lawsuit.
"Porsche SE also continues to maintain that the New York Supreme Court is not an appropriate forum for the resolution of the hedge funds' alleged claims, and that their claims should be heard in Germany, where several of these funds have brought claims against Porsche SE," the company said.
Then again, it's no surprise that the hedge funds aren't interested in placing all their bets on the German courts. In June, a German judge raised doubts about the hedge funds' lawsuit in that country.