Porsche Automobil Holding SE (POAHF.PK,POAHY.PK) said Thursday a New York appeals court has dismissed a lawsuit by U.S. hedge funds that charged the company of having caused them huge losses amid its 2008 grabbing of shares in Volkswagen AG (VLKAF.PK,VKW.L).
Plaintiffs in the lawsuit are 26 hedge funds, including Glenhill Capital LP and Greenlight Capital LP, who accused Porsche of scripting a surge in Volkswagen share prices in October 2008 by discreetly buying most of the traded shares of Volkswagen in an innocuous bid to acquire it.
These hedge funds meanwhile had bet on a decline in share prices of Volkswagen, believing Porsche's denial of plans to take a 75 percent stake in Volkswagen.
Nonetheless, Porsche on October 26, 2008, said it controlled 74.1 percent of Volkswagen and was mulling its acquisition. That news led to a surge in share prices of Volkswagen and caused the hedge funds losses of over $1 billion.
In 2011, the hedge funds filed a lawsuit against Porsche, and last August, the New York State Supreme Court denied Porsche's motion seeking dismissal of the suit.
Porsche in November asked the appeals court to reverse that decision.
In its dismissal of the lawsuit Thursday, the Appellate Division of the New York State Supreme Court held that New York is not an appropriate forum for the resolution of the hedge funds' claims.
Plaintiffs have 30 days to file an appeal to the New York State Court of Appeals, the highest court of the State of New York.
Porsche's bid for Volkswagen failed and it was forced to sell its sports-car business to Volkswagen.
Porsche is also being sued in Europe over the issue.
Several hedge funds in the case had brought a similar $2 billion lawsuit against Porsche in federal court, but a U.S. District Court dismissed that case in December 2010. The hedge funds appealed against the dismissal to the federal appeals court in New York, which is yet to rule on the matter.
In Germany, Porsche closed at 58.07 euros, up 0.87%.
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