Porsche Hedgefund Litigation Reaches Yet Another Court in Germany

Oberlandesgericht_Celle,_Schloßplatz_2,_Front_Aufschrift_Ernst_August_König_1840We have tracked the proceedings brought by investors against Porsche for damages allegedly suffered when Porsche attempted to take over Volkswagen over the last couple of years, and followed the journey of these claims through courts in London, New York, Frankfurt, Stuttgart, Braunschweig and Hannover. Now, at least a substantial part of these proceedings ended up in yet another German court, namely in the Court of Appeals (Oberlandesgericht) Celle.

Yesterday, the District Court (Landgericht) Hannover decided to bundle claims brought by 32 different plaintiffs and transferred these matters to the Court of Appeal Celle under the Capital Market Investors Model Proceedings Act (Kapitalanlegermusterverfahrensgesetz, KapMuG). I have described the basic mechanics of this Act, the closest thing German law has to a class action, in previous Posts (here and here, for example). The District Court has listed 83 issues in total on which it seeks an advance ruling from the Court of Appeal. The order will be published shortly in an official register (Klageregister) hosted by the Federal Gazette (Bundesanzeiger). The order submitting these issues to the Court of Appeal cannot be challenged.

The further process now will be as follows: The Court of Appeal will conduct the model proceedings and decide the legal and factual issues before it. The Court of Appeal’s decision can be appealed further to the Federal Supreme Court (Bundesgerichtshof). Once the findings of the Court of Appeal have become full and final, it is for the first instance judges from when these matters originated, in our case, for the District Court Hannover, to decide the individual matters before them in the light of the findings of the higher courts.

To the extent that further proceedings against Porsche are pending that have not yet been bundled and sent to Celle, the District Court Hannover may decide to stay these proceedings, pending the outcome of the model proceedings.

The photo by Bernd Schwabe (via Wikipedia) shows the Celle court house, built in 1840 during the reign of King Ernest Augustus I of Hanover.

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