Porsche Hedge Fund Litigation: Set-back for Claimants, as Inspection of Files in Criminal Investigation is Denied

We have covered the Porsche hedge fund litigation here before. One of the challenges that the claimants face is to built their case of market manipulation, given the restrictions of German civil procedure. As Karin Mattusek, who covers the Porsche litigation for Bloomberg Law, put it: “Porsche Plaintiffs Seek $5 Billion With Limited Tools”. The claimants do not have access, through pre-trial discovery or disclosure, to documents and emails that record Porsche’s internal communication and decision making process, but still have the full burden of proof.  Continue reading

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Update: Ferdinand Piech, Porsche and the Volkswagen Options

Ferdinand Piech has not been granted admission to appeal (Nichtzulassungsbeschwerde) the judgment of the Stuttgart Court of Appeals (Oberlandesgericht) of February 2012.  In this judgment, the Stuttgart court found that Mr. Piech had violated material fiduciary duties (Kardinalpflichten) which he owed to Porsche as a member of its supervisory board: His public statements showed that he failed to exercise proper control over the Volkswagen share option arrangements that were entered into as part of Porsche’s attempt to take over Volkswagen. If Mr. Piech could not understand what was going on, he should have investigated further, and potentially even tried to stop these transactions. Continue reading

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The Porsche/Volkswagen Saga – News from the Legal Battlefields

Thanks to Porsche’s attempt to take over Volkswagen with an elaborate option strategy, high-stakes shareholder suits have finally come to Germany. International financial investors have brought actions against Porsche and Volkswagen, seeking damages in the order of several billions. The claimants argue, in short, that they suffered losses when Porsche cornered the market with the use of fancy derivatives and failed to disclose the true position it had taken. Continue reading

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