Porsche Wins Ruling in Bid to Torpedo Pendragon U.K. Suit
Porsche SE won a ruling in its bid to block a U.K. court from hearing a $195 million suit filed over the 2008 use of options in the failed bid to take over Volkswagen AG. (VOW)
The Stuttgart Regional Court said it can continue to hear a case Porsche filed against Cayman Islands investment fund Pendragon (Master) Fund Ltd. because the suit was filed 10 days before the fund filed its own action in London. The ruling can be appealed, Bernhard Schabel, a spokesman for the tribunal, said by telephone today.
The decision is a win in Porsche’s battle against lawsuits that are seeking more than 5.4 billion euros ($7.1 billion) combined. A London court in March stayed Pendragon’s U.K. action, saying it will wait until the German courts have determined which case was filed first. A suit in the U.K. would allow plaintiffs to ask for more disclosure than in Germany. The information could subsequently be used against Porsche in the German courts.
By filing a so-called torpedo suit in Stuttgart, Porsche, the holding company that sold the Porsche car brand to VW last year, invoked European Union rules saying the venue where a party files an action first prevails, and bars another country’s court from assuming jurisdiction over the same issue.
Lara Melrose, a lawyer representing Pendragon in the U.K., declined to immediately comment on today’s ruling.
Porsche shares advanced 1.9 percent closing at 65.25 euros in Frankfurt trading.
Most of the cases filed by hedge funds and other investors are now pending in Germany after Porsche won dismissal of many of the lawsuits filed in the U.S.
Investors claim Porsche lied for months about its intentions to acquire VW before disclosing on Oct. 26, 2008, that it controlled 74.1 percent of the larger company’s common stock and was seeking a takeover. The news caused the shares to surge as short sellers tried to cover positions.
Porsche welcomes today’s ruling and believes the claims are unfounded, Albrecht Bamler, a spokesman for the company, said in an e-mailed statement.
The fallout from Porsche’s failed bid has shown no signs of fading. After an investigation of more than three years, former Chief Executive Officer Wendelin Wiedeking and ex-Chief Financial Officer Holger Haerter, who led the takeover drive at the time, were charged with market manipulation in December.
Lawyers for the two have denied the allegations and said the charges won’t stick.
Soaring debt eventually led Porsche’s takeover bid to unravel, prompting a rescue by Volkswagen and reducing Porsche to a holding company for 50.7 percent of VW’s common stock. The Wolfsburg, Germany-based manufacturer completed the purchase of the Porsche unit that makes the 911 sports car in August last year.
Today’s case is LG Stuttgart, 18 O 220/12.
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