In the Porsche securities litigation, where billions are at stake following Porsche’s failed attempt to take over Volkswagen, actions have been brought in courts in New York, London, Stuttgart and Braunschweig. Whereas in New York and Stuttgart, it was so far all about jurisdiction – or the lack of it – Braunschweig has already ruled on the merits of these claims back in September 2012, when it dismissed the first two smaller actions against Porsche. So it came as a bit of a surprise when, in a hearing on April 17, 2013 that dealt with the second wave of bigger cases, the Braunschweig court showed some sympathy for an application made by one of the claimants to move the matter to another court.
Porsche announced yesterday that it has reached an agreement with 26 hedge funds who had sued Porsche in U.S. courts for damages allegedly suffered by Porsche’s shorting of Volkswagen shares in 2008. Under the agreements, “plaintiffs have agreed to waive any appeal of the decision of the Appellate Division of the New York State Supreme Court dismissing their complaints, and Porsche SE has agreed not to raise any statute of limitations defense with respect to claims filed by Plaintiffs before a court in Germany within 90 days.” This agreement comes after the Appellate Division of the New York State Supreme Court at the end of December 2012 had found in favour of Porsche. It had reversed an earlier denial of Porsche’s motion to dismiss the U.S. lawsuits by the New York State Supreme Court, finding that New York is not an appropriate forum for the resolution of the hedge funds’ claims. Porsche appeared to be in a comfortable position, so why this agreement? Continue reading
In the law suits brought by financial investors against Porsche in conjunction with its attempt to take over Volkswagen, a first hearing took place at the Braunschweig District Court (Landgericht) today. Bloomberg Law was brave enough to cover the story yesterday, ahead of the hearing, and to make predictions, namely that it would be hard for the plaintiffs to convince to court – rightly pointing to the limitations on finding hard facts to support their case under German procedural rules, in the absence of discovery or disclosure.
And according to today’s report in Frankfurter Allgemeine Zeitung, Bloomberg’s assessment was pretty much on target: The judge’s initial evaluation of the case before him was, according to Frankfurter Allgemeine, that plaintiffs’ arguments had no legal basis, neither in the German civil code nor in the securities laws. The facts pleaded by the plaintiffs were not sufficient to support a cause of action in tort (vorsätzliche sittenwidrige Schädigung).
The next hearing has been scheduled for September 19, 2012. Watch this space.