Elliott Hedge-Fund Group Loses German Court Porsche Ruling

  • Funds sought right to gather evidence from prosecutors' files
  • Court upholds rulings that told funds they aren't victims

A group of hedge funds led by Elliott Associates LP lost a bid at Germany’s top court to gain access to prosecutors’ files for a civil lawsuit seeking 1.8 billion euros ($1.94 billion) in damages from Porsche Automobil Holding SE over market-manipulation allegations.

The Federal Constitutional Court upheld lower courts’ decisions that the seven funds aren’t the victims of possible criminal stock-market manipulation being investigated by Stuttgart prosecutors. The funds didn’t demonstrate that they had no other way to prove their cases, the judges said in a ruling published on the court website.

“The restrictive interpretation of the term victim, by reference to the scope of the statutory offense, is an established differentiation in case law and legal literature,” the judges said.

The case stems from Porsche’s unsuccessful attempt in 2008 and 2009 to take over Volkswagen AG with the help of a secret option strategy. While former executives and Stuttgart-based Porsche currently have to stand trial on criminal charges over the issue, various groups of investors are trying to convince civil courts that the company owes them damages for losses in VW-related securities they held at the time.

A spokesman for Elliott declined to comment.

Elliott, Perry Partners LP, D.E. Shaw & C LP, York Capital Management LP and The Liverpool Limited Partnership have sued claiming Porsche lied to them about its intention in 2008, causing them to lose money when VW shares jumped in Oct. that year after Porsche revealed its option holdings. The case is now pending in a Hanover court. It’s one of several lawsuits seeking a total of 5 billion euros from Porsche.

The case is: BVerfG, 1 BvR 2449/14.

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