The issue of Porsche’s failed attempt to acquire Volkswagen in 2008 has surfaced again. Last week the automaker’s former CEO Wendelin Wiedeking and ex-COO Holger Haerter were formally charged in Stuttgart, Germany with market manipulation. Moreover, Porsche filed a lawsuit against the Pendragon fund and its manager in an effort to keep the case in its homeland.
On Thursday, December 27, the Appellate Division of the New York state Supreme Court ruled that the state is not the proper location for hedge funds to sue Porsche over the 2008 failed VW takeover.
The 26 hedge funds, which sued Porsche for more than US$1 billion in damages, claimed that the company intentionally misled investors over its intentions concerning a possible takeover of VW for the best part of 2008
The court rejected the lawsuit on the grounds that there’s “an inadequate connection” between New York and the issue, since only phone calls and emails took place there and the documents are located in Germany.
“We find that these connections failed to create a substantial nexus with New York, given that the events of the underlying transaction otherwise occurred entirely in a foreign jurisdiction”, an appellate panel said.
Robert Giuffra, an attorney for Porsche at Sullivan & Cromwell LLP, said, “this is an important victory for Porsche”, while James B. Heaton, an attorney for the hedge funds, declined to comment.
By Andrew TsaousisStory References: Bloomberg News