Investors Launch $2.6 Billion USD Lawsuit Against Porsche Over Failed VW Takeover Bid

By Carl Malek

Typically, the start of a brand new year is usually an opportunity to look towards a bright future filled with new beginnings. Unfortunately for the folks at Porsche, an ugly incident from the company’s past has resurfaced thanks to the efforts of a group of investment funds which have filed a lawsuit seeking $2.6 billion USD in damages over the events that took place during the company’s ill-fated attempt to take over Volkswagen back in 2008.

In a statement released by the group they claim ” Porsche gained control over the price of VW common stock as it secretly built enormous derivative positions covering almost all of VW’s freely traded shares, then triggered a massive short squeeze, and finally released billions of euros worth of shares into the short squeeze for its own profit.” Porsche has so far denied the accusations brought forth against it by the investment fund group, with Porsche spokesman Frank Gaube issuing a brief statement stating, ” The accusations are not justified and we reject them.”

This is not the first time the company has come under legal fire as a result of its takeover attempt. In addition to this current lawsuit, Several other lawsuits were also previously launched against the company both in Germany and the United States regarding allegations that the company clandestinely acquired shares of VW stock as part of an effort to take over the company while at the same time denying the aforementioned takeover attempt publicly. It is important to note that all of these prior lawsuits ultimately failed once they made their way through the judicial system.

While it is unknown whether this current lawsuit will face the same fate, It does serve as another roadblock for both Volkswagen and Porsche, who agreed to combine in 2009 after Porsche racked up over 10 billion euros in debt as a result of the bungled takeover effort. However, the merger between the two companies has so far been on hold due to not only the numerous lawsuits that followed, but also because of VW’s desire to not be formally implicated until this issue reaches its final resolution. That finality may take a while.

Author: Carl Malek

Carl Malek is Techshake’s resident German car fanatic and follower of all things General Motors. Carl first entered the world of automotive journalism as a freelance photographer during his freshman year of college before making the switch to automotive writing several years later. Carl developed an interest in cars at an early age, which helped him overcome the challenges of a learning disability in mathematics. In addition to writing for Techshake community, Carl also contributes to many car forums and enjoys attending automotive events in the Metro Detroit area with his family. Carl’s message for others with learning disorders is to believe in yourself, be persistent, and face all challenges head on.

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1 Comment

  1. The whole Porsche takeover try was just weird and whacked out to begin with. It just didn’t make any sense.

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