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: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

Five Tips For Successfully Marketing Your Hedge Fund

Jan 30 2015 | 9:14am ET

When it comes to the hedge fund industry, the notion of “build it and it will...

 

Editor's Note