UPDATE 2-German court rejects $1.9 bln Porsche SE investor lawsuit
* Porsche wrongdoing cannot be proved -judge
* Ruling shows outstanding lawsuits also unfounded -Porsche
* Porsche still faces 4 bln euros damages claims in Germany
* Unclear whether hedge funds will appeal verdict (Adds analyst comment, hedge fund position, background)
By Ilona Wissenbach and Andreas Cremer
STUTTGART, Germany, March 17 (Reuters) - A German court has dismissed a lawsuit by hedge funds seeking 1.36 billion euros ($1.9 billion) in damages from investment company Porsche SE , in a ruling that bodes ill for other claimants pushing damages claims against Porsche.
Two dozen hedge funds, including Viking Global Investors, Glenhill Capital and Greenlight Capital, had accused Porsche SE of camouflaging a plan to acquire much-bigger Volkswagen AG and secretly piling up a holding in Europe's largest automaker during 2008.
In March that year Porsche SE dismissed talk that it intended to take over VW, but seven months later it revealed that it controlled 74.1 percent of VW's common stock, just short of the 75 percent takeover threshold.
Porsche's statement caused VW shares to surge to record highs as short-sellers scrambled to cover their positions.
Judge Carola Wittig at the regional court in Stuttgart, where Porsche is based, said it could not be proved that Porsche SE deliberately caused harm to hedge funds' positions.
Porsche SE, the family-controlled holding company that owns a majority stake in VW, still faces more than 4 billion euros in additional damage claims through a number of investor lawsuits pending at German courts in Hanover and Braunschweig.
"This is good news for Porsche, also with a view to pending cases," Exane BNP Paribas analyst Stuart Pearson said. "But an appeal is virtually inevitable and may last up to 18 months."
A hedge fund representative declined to say whether plaintiffs would appeal, while Porsche said that Monday's ruling confirmed its view that remaining cases were unfounded.
VW and Porsche agreed to merge in August 2009 after Porsche, which produces fewer cars in a year than VW does in a week, racked up more than 10 billion euros of debt in a botched attempt to buy its larger competitor.
The unraveling of Porsche's finances opened the door for VW to turn the tables and acquire 49.9 percent of the sports car maker in December 2009. Initial plans for a merger were dropped in 2011 over legal uncertainty, prompting VW to buy the second half of Porsche's auto brand in August 2012.
Porsche SE, due to hold its annual press conference on Tuesday, has said it may expand its assets beyond control of VW shares when litigation risks subside.
After repaying 2 billion euros of debt in 2012 with the proceeds from selling its auto business to VW, Porsche SE is looking to make investments in energy trading and real estate. ($1 = 0.7181 euros) (Writing by Andreas Cremer; Editing by Ludwig Burger and David Goodman)