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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...