STUTTGART, Germany (Reuters) - Hedge funds seeking 1.2 billion euros ($1.4 billion) in damages from Porsche SE (PSHG_p.DE) over its botched attempt to take over carmaker Volkswagen (VOWG_p.DE) in 2008 look set to have their case dismissed, according to a German judge.
“On balance it’s our view that we consider the lawsuit, or the appeal, to be unpromising for several reasons,” Gerhard Ruf, judge at the higher regional court in Stuttgart, said on Thursday ahead of a hearing of the case.
“We are inclined to dismiss the case,” he added.
Two dozen hedge funds, including Viking Global Investors, Glenhill Capital and Greenlight Capital, a year ago accused investment company Porsche SE of camouflaging a plan to acquire Volkswagen (VW) and secretly piling up a holding in Europe’s largest automaker during 2008.
The case combining 1.36 billion euros in damage claims — one of several civil cases lodged at different German courts seeking more than 5 billion euros in compensation — was rejected by a separate Stuttgart court.
Thursday’s appeal was launched by 19 plaintiffs.
In March 2008, Porsche SE dismissed talk it intended to take over VW, but seven months later revealed 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.
“There is no evidence whatsoever suggesting that short-sellers were deliberately misled,” said Markus Meier of law firm Hengeler Mueller which represents Porsche.
A ruling on Thursday’s appeal will be announced on March 26, the judge said.
Reporting by Ilona Wissenbach; Writing by Andreas Cremer; Editing by Mark Potter