Hedge Funds Avoid Dismissal Of Case Against Porsche

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.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note