Porsche Automobil Holding SE (POAHF, POAHY), a holding company of the German sports car maker, said Wednesday that several hedge funds have withdrawn their appeals in the proceeding before the U.S. Court of Appeals for the Second Circuit.
The company noted that twelve plaintiffs, including inter alia hedge funds of the Elliottgroup, from the current 32 plaintiffs withdrew their appeal, with Porsche's consent, against the decision of the U.S. District Court for the Southern District of New York dismissing their actions. However, the withdrawal of the appeal still requires the acceptance by the court.
A total of 46 hedge funds had filed actions for damages of more than $2.5 billion in the aggregate against Porsche and partly former members of its management board of Porsche in the U.S.
The company noted that the appellate proceeding concerning the remaining 20 plaintiffs remains unaffected by the withdrawal of the appeal by 12 of them. Porsche continues to considers the actions to be inadmissible and the alleged claims to be without merit.
The plaintiffs have accused Porsche of lying and scripting a surge in Volkswagen AG (VLKAF,VKW.L) share prices in October 2008 by discreetly buying most of the traded ordinary shares of Volkswagen in an innocuous bid to acquire it. In March 2008, Porsche had said no merger was planned.
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. However, after Porsche on October 26, 2008, said it controlled 74.1 percent of Volkswagen and was mulling its acquisition, share prices of Volkswagen surged and caused the hedge funds losses of over $1 billion.
The U.S. District Court for the Southern District of New York had originally dismissed the actions in December 2010. Porsche is also being sued in Europe over the issue.
Porsche's bid for Volkswagen failed and it was forced to sell its sports-car business to Volkswagen after it racked up more than 10 billion euros of debt on the failed takeover attempt.
Meanwhile, the twelve plaintiffs are also involved in a pending action before the Regional Court of Braunschweig in Germany for about 1.8 billion euros in damages against Porsche since the end of the year 2011, which remains unaffected by the withdrawal of this appeal.
In late-December, the Appellate Division of the New York State Supreme Court had dismissed a similar lawsuit brought by 26 hedge funds, including Glenhill Capital LP and David Einhorn's Greenlight Capital LP, saying it is not an appropriate forum for the resolution of the hedge funds' claims. They were seeking total damages of more than $1.4 billion, but agreed not to pursue a further appeal of claims.
On Frankfurt's Xetra, Porsche shares closed Wednesday's regular trading session at 61.90 euros, up 0.70 euros or 1.14% on a volume of 0.40 million shares, and Volkswagen shares closed at 158.50 euros, up 1.55 euros or 0.99% on a volume of 71,563 shares.
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