Detroit Bureau on Twitter

Posts Tagged ‘porsche lawsuit’

No Fast Cash from Porsche, Appeals Court Rules

Hedge funds lose again when it comes to the German maker.

by on Aug.18, 2014

Hedge funds lost another round in court over a suit stemming from Porsche's attempted takeover of Volkswagen, which saw Wolfgang Porsche, left, and Ferdinand Piech, chairman of VW, on the same team, but with VW in charge.

In what many might consider karma, dozens of hedge funds looking for a payoff from the controversy surrounding Porsche failed bid for Volkswagen AG suffered were shot down in court: again.

The U.S. Court of Appeals for the 2nd Circuit in New York City upheld the dismissal of a lawsuit by a group of more than two dozen American and British hedge funds that claimed to suffer big losses in the fall of 2008 when Porsche executives manipulated the company’s holdings of Volkswagen stock in what turned out to an abortive bid to take over VW.

Subscribe and Stay on Top!

Porsche had started buying shares in 2006 but ultimately the plan collapsed during the financial crisis that followed the collapse of Lehman Brothers. (more…)

Porsche Facing More Legal Trouble

Further challenges to VW/Porsche merger.

by on Jan.03, 2012

The takeover attempt crafted by former Porsche CEO Wendelin Wiedeking now haunts the German maker.

A group of investment funds has filed a new lawsuit against Porsche Automobile Holding SE, seeking to recover approximately, $3.2 billion in losses suffered during Porsche’s failed fort to takeover Volkswagen AG in 2008.

The complaint, filed in district court in Stuttgart, alleges 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.

In the next step in the scheme, Porsche triggered a massive short squeeze, and finally released billions of Euros worth of shares for its own profit.

Subscribe Now - It's Free!

The web site Investopia describes a short squeeze this way: “If a stock starts to rise rapidly, the trend may continue to escalate because the short sellers will likely want out. For example, say a stock rises 15% in one day, those with short positions may be forced to liquidate and cover their position by purchasing the stock. If enough short sellers buy back the stock, the price is pushed even higher.”