US hedge funds seeking more than a billion euros in damages from Porsche lost another lawsuit in a German court, after the judge ruled they cannot hold the sports carmaker liable for their failed investments.
The Higher Regional Court in the town of Stuttgart, Germany, ruled on Thursday that claims for damages brought against Porsche by 19 US hedge funds were "unjustified," because they couldn't prove the sports car manufacturer acted "deliberately and contrary to honest practices."
The hedge funds - which includes Viking Global Investors, Glenhill Capital and Greenlight Capital - sought damages to the tune of $1.4 billion (1.2 billion euros) from Porsche. They had accused the carmaker of camouflaging a plan to acquire its bigger German rival Volkswagen (VW) in 2008 and secretly piling up a holding in Europe's biggest carmaker.
In 2008, Porsche's investment division publicly dismissed speculations over a VW takeover, but it revealed seven months later it controlled 74.1 percent of the firm's common stock. Porsche's statement caused VW shares to surge massively, while short sellers like the hedge funds scrambled to cover their positions, taking huge losses.
Markus Meier of Hengeler Müller, the law firm representing Porsche, said during the lawsuit there was absolutely no evidence that short sellers were deliberately misled during the attempted takeover.
This perception was shared by the court in Stuttgart, which said the Porsche press release of 2008 had been "ambiguous at best," leaving room for "interpretation."
The court also ruled the verdict wasn't allowed to be appealed before a higher court - a decision that can, however, be appealed by the hedge funds.
Porsche described the ruling as "yet another important victory," as it marked the fifth verdict in favor of the carmaker in a German court. However, there is a series of other lawsuits against Porsche pending in German courts, with hedge funds seeking a total of 5 billion euros in compensation.
uhe/el (AFP, dpa, Reuters)