Investors Launch $2.6 Billion USD Lawsuit Against Porsche Over Failed VW Takeover Bid
By Carl Malek
Typically, the start of a brand new year is usually an opportunity to look towards a bright future filled with new beginnings. Unfortunately for the folks at Porsche, an ugly incident from the company’s past has resurfaced thanks to the efforts of a group of investment funds which have filed a lawsuit seeking $2.6 billion USD in damages over the events that took place during the company’s ill-fated attempt to take over Volkswagen back in 2008.
In a statement released by the group they claim ” Porsche gained control over the price of VW common stock as it secretly built enormous derivative positions covering almost all of VW’s freely traded shares, then triggered a massive short squeeze, and finally released billions of euros worth of shares into the short squeeze for its own profit.” Porsche has so far denied the accusations brought forth against it by the investment fund group, with Porsche spokesman Frank Gaube issuing a brief statement stating, ” The accusations are not justified and we reject them.”
This is not the first time the company has come under legal fire as a result of its takeover attempt. In addition to this current lawsuit, Several other lawsuits were also previously launched against the company both in Germany and the United States regarding allegations that the company clandestinely acquired shares of VW stock as part of an effort to take over the company while at the same time denying the aforementioned takeover attempt publicly. It is important to note that all of these prior lawsuits ultimately failed once they made their way through the judicial system.
While it is unknown whether this current lawsuit will face the same fate, It does serve as another roadblock for both Volkswagen and Porsche, who agreed to combine in 2009 after Porsche racked up over 10 billion euros in debt as a result of the bungled takeover effort. However, the merger between the two companies has so far been on hold due to not only the numerous lawsuits that followed, but also because of VW’s desire to not be formally implicated until this issue reaches its final resolution. That finality may take a while.