Porsche faces German lawsuit related to the sale of Vw stock options in 2008

Article by Christian Andrei, on January 25, 2011

A Stuttgart, Germany, district court divulged that the first lawsuit in Germany against Porsche Automobil Holding SE related to the sale of Volkswagen AG stock options in 2008 has been filed by an unidentified plaintiff, who is represented by Christoph von Arnim.

A court spokesman said that in the new lawsuit filed by Berlin-based law firm FPS Rechtsanwaelte & Notare, the plaintiffs want its EUR3.1 million ($4 million) loss compensated by Porsche and the German unit of Canadian lender Maple Bank.

These lawsuits represent a significant concern for Porsche's planned merger with Volkswagen, scheduled for 2011, since U.S. hedge funds sued the company for billions, putting the deal at risk.

Von Arnim said the plaintiff is claiming damages incurred on options bets after he relied on Porsche's public statements that it did not intend to take over Volkswagen.

Von Arnim said that by denying its intention, Porsche manipulated the price of VW shares to its own advantage, thus hurting market participants who relied on the adequacy of the information.

Some investors alleged that they were victimized when Porsche's banks secretly amassed a stake of VW voting shares as collateral against cash-settled options as part of the so-called "stealth takeover" of VW.

On Oct. 26, 2008, Porsche said it controlled most of VW's common stock, causing the shares to shoot up as short sellers rushed to cover their positions. [via autonews - sub. required]

Topics: vw, porsche, lawsuit, germany

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