| NEW YORK
NEW YORK Nov 29 A lawyer for Porsche Automobil
Holding SE urged a New York state appeals court to
overturn a lower court decision allowing 26 hedge funds to sue
the German automaker in the state.
The hedge funds filed lawsuits last year claiming they lost
$1 billion as a result of what they called Porsche's deceptive
manipulation of the market for Volkswagen AG shares in 2008.
The hedge funds said they sold Volkswagen shares short after
Porsche denied it planned to acquire control of Volkswagen. They
lost money when Porsche later said it had bought Volkswagen
shares and intended a takeover.
In August, a lower court denied Porsche's motion to dismiss
the case, ruling it could proceed in New York.
In oral arguments on Thursday, Robert Giuffra, representing
Porsche, told New York's Appellate Division, First Department,
that the case belonged in Germany.
New York is not the appropriate forum for a case involving a
German defendant's purchases of a German-listed stock, he said.
Giuffra also said none of the hedge funds are incorporated
in New York.
Justice David Friedman focused on the German connections.
"You're talking about shares of stock that are not even traded
in New York," Friedman said. "Where is the New York interest?"
"It seems natural Germany is going to have an interest in
regulating two German companies," Friedman added.
Attorney J.B. Heaton, who argued for the hedge funds, told
the judges the hedge funds were either based in New York or
advised by New York-based investment advisers. He also said
phone calls were made from New York to Porsche.
"Porsche set out to target short sellers," said Heaton, of
the law firm Bartlit Beck Herman Palenchar & Scott.
The court made no immediate ruling.
The cases are Glenhill Capital LP v. Porsche Automobil
Holding, 650678/2011, and Viking Global Equities LP v. Porsche
Automobil Holding, 650435/2011, New York state Supreme Court,
New York County.