Porsche SE, the family-controlled holding company that owns a majority stake in carmaker Volkswagen AG (VOW), said an additional 12 hedge funds dropped a U.S. court appeal in a market manipulation suit.
A total of 24 funds have now withdrawn their appeal of an earlier court decision dismissing the case, the Stuttgart, Germany-based holding company said in a statement today. Eight plaintiffs continue to contest the ruling.
Porsche said earlier today at the company’s annual general meeting that it’s confident of keeping the upper hand in the lawsuits, many of which have now shifted to a German court.
“We’re optimistic about our prospects,” Martin Winterkorn, chief executive officer of both Porsche SE and Volkswagen AG, said at the meeting in Leipzig, Germany. “We continue to view all pending lawsuits against Porsche SE as unfounded.”
Porsche is fighting investors’ legal complaints in Germany, the U.S. and the U.K. about the strategy it used to buy control of VW more than four years ago. The Stuttgart, Germany-based company may be able to consolidate most of the litigation in its home country now that Elliott International LP and 23 other hedge funds have dropped a U.S. court appeal.
Public prosecutors in Stuttgart separately are looking into allegations against Porsche’s former CEO Wendelin Wiedeking and former chief financial officer Holger Haerter. Earlier this year investigations were widened to members of the company’s supervisory board.
Porsche SE Supervisory Board Chairman Wolfgang Porsche said at the meeting today that prosecutors have started investigations against him and others who were supervisory board members in 2008. He said he mandated Daniel M. Krause as lawyer and views all legal claims against him as “unfounded.”
The lawsuits and investigations by prosecutors center on investors’ claim that Porsche, which was mainly a sports-car and sport-utility vehicle maker at the time, failed to inform shareholders about its takeover plan for Volkswagen.
The funds including Elliott International agreed to withdraw their suit at the U.S. Court of Appeals in New York, and will instead focus on a parallel German case.
The legal wrangling scuttled a planned merger between the two companies. Volkswagen completed the acquisition of full control of the Porsche sports-car business in August, ending a seven-year saga that saw VW turn the tables on the manufacturer of the 911 model following the failed takeover attempt.
Elliott International’s case is among a number of lawsuits at the court in Braunschweig, Germany, with plaintiffs seeking more than 4 billion euros ($5.23 billion) combined. The decision in the Elliott International case doesn’t end U.S. litigation. The eight remaining funds are continuing a separate case in U.S. federal court.
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