Plaintiffs in Porsche case may benefit from prolonged litigation

Article by Anita Panait, on April 18, 2013

When a case is up in a court, plaintiffs typically would want to have it resolved as soon as possible. However, that may not be the call of hedge funds and institutional investors who are seeking EUR4 billion ($5.2 billion) from Porsche SE over its failed takeover of Volkswagen. It turned out that they may be hoping that the three German civil court suits will take a long time to resolve their lawsuits.

Robert Heym, a lawyer at Graf von Westphalen, remarked that drawn-out criminal investigations into former executives Wendelin Wiedeking and Holger Haerter that now include board members Wolfgang Porsche and Ferdinand Piech may give plaintiffs some advantage.

He said that when the civil cases take longer, criminal proceedings may reveal facts that could damage Porsche or Volkswagen. He added that noted plaintiffs are gambling to secure additional arguments from the criminal case to boost their case. Porsche have been staving off claims that it failed to disclose plans to take over Volkswagen and tried to manipulate the price of VW stock.

On Oct. 26, 2008, Porsche announced that it controlled 74.1 percent of VW’s common stock and was seeking another percent to breach the limit required for a takeover under German law. The announcement caused the shares to jump to record highs as short sellers hurry to cover positions. The flak led to the firing of Porsche CEO Wiedeking and CFO Haerter.

It also led to Porsche agreeing to be acquired by Volkswagen after incurring over EUR10 billion in debt during the hostile bid. A merger between the Porsche and Volkswagen was junked in 2011 due to uncertainties from the litigation. Volkswagen had reduced Porsche to a holding company for 50.7 percent of VW's common stock. Volkswagen has also acquired Porsche’s carmaking unit.

Topics: porsche

If you liked the article, share on:

Comments

Recommended

Hyundai is introducing a new 2018 Accent that is not only wider and longer, but is now also sporting a new look that is more serious than the previous model....
by - February 20, 2017
Fans and enthusiasts of the BMW M2 in the United States could now rejoice. This comes as their favorite BMW M2 is getting a limited edition version as prepped by...
by - February 20, 2017
Carmakers usually leave us thirsty for information on whether they would introduce a new, refreshed or face-lifted vehicle and on when they intend to launch it. There are reasons for...
by - February 20, 2017
Cadillac’s CT6 full-size prestige-luxury sedan is still somewhat new. It has been offered to the global auto market for two model years – 2016 and 2017. But for those who...
by - February 19, 2017
In many industries, it is the rivalries that make things exciting. In basketball for example, there is the well-known rivalry between the Los Angeles Lakers against the Boston Celtics. For...
by - February 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries