Plaintiffs seeking 4 billion euro for Porsche’s failed takeover of VW, will have to wait a while as civil court suits in Germany take a long time to resolve.
As judged in the US have rebuffed such suits, investors now rely on Germany, where tomorrow, April 17th, a court in Braunschweig will hear three cases. Criminal probes connected to former executives Holger Haerter and Wendelin Wiedeking, and board members Ferdinand Piech and Wolfgang Porsche, might be enough to offer plaintiffs an advantage.
“There is the danger that, the longer the civil cases take, criminal proceedings may reveal one or the other fact which may have the potential to damage Porsche or Volkswagen,” said Robert Heym, a Munich lawyer who isn’t involved in the cases. “The plaintiffs are certainly gambling to win additional arguments from the criminal case to beef up their position.”
The company was sued in 2008 when Porsche disclosed in owned 74.1% of VW’s common stock and planned to buy another 1% necessary to take over the company. The automaker was accused of hiding it intentions and trying to manipulate the price of VW stock. Immediately after the announcement shares reached record highs as short sellers struggled to cover positions. In 2011 the merger between Porsche and VW was scrapped due to uncertainty from the litigation.
“It’s always difficult for plaintiffs to show exactly how and why they lost money because of particular market information,” said Graf von Westphalen’s Heym. “The counter argument is, of course, that whoever speculates on the market can also suffer losses.”