Peter Bert's Blog about Litigation, Arbitration and Mediation in Germany – Art Law, Case Law, News etc.
We had reported earlier that Porsche had struck a deal with some of the New York hedgde fund claimants to discontinue their US actions. In return, Porsche had agreed not to invoke the statute of limitation if the actions were filed again in Germany. According to press reports, 25 funds, including Viking Global,Tiger Global, Royal Capital, Glenhill Capital and Greenlight Capital have now filed claims in the order of EUR 1.4 billion against Porsche SE.
As previously reported, Holger Härter, Porsche’s CFO at the time of the attempted Volkswagen take-over, is facing criminal charges for his conduct in the transaction. The first trial is coming to a close now. The Stuttgart public prosecutor’s office (Staatsanwaltschaft) accused Härter and members of his finance team of having misrepresented the exposure under the option agreements to BNP Parisbas when they negotiated Porsche’s credit line and hence obtained credit by deception (Kreditbetrug; Sec. 265b German Criminal Code, Strafgesetzbuch). This is a criminal offence, even if the bank did not suffer any credit – merely having put the bank at risk suffices.
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? Read More