Tuesday, 26 July 2016
Last updated 10 min ago
Jan 2 2013 | 3:45pm ET
For the second time, a group of hedge funds has seen its lawsuit against Porsche SE tossed into the trash.
A New York State appeals court dismissed the $1.4 billion claim, which accused the automaker of manipulating the market in Volkswagen shares, secretly acquiring a majority stake before announcing plans to acquire VW. That plan never came to fruition, and VW in turn bought Porsche's sports-car franchise, but the hedge funds alleged unjust enrichment, anyway.
An earlier lawsuit was junked by federal courts in 2011. The New York Appellate Division ruled that there simply was too flimsy a link between the case and the court's jurisdiction.
“The only alleged connections between the action and New York are the phone calls between plaintiffs in New York and a representative of defendant in Germany, and the e-mails sent to plaintiffs in New York but generally disseminated to parties elsewhere,” the court ruled. “We find that these connections failed to create a substantial nexus with New York, given that the events of the underlying transaction otherwise occurred entirely in a foreign jurisdiction.”
More than two dozen hedge funds were involved in the lawsuit, including Elliott Associates, Glenview Capital Partners and Viking Global Equities.