Your New Year’s Day hangover is nothing compared to the headache Porsche is currently threatened with. A group of unnamed investors are suing the company for about 2.6 billion dollars over the company’s failed Volkswagen takeover attempt in 2008.
Official details are scarce in the case, but according to OTS newswire as of late Friday, the lawsuit was filed in the district court of Stuttgart, Germany. Additionally, according to a story published by Reuters with sources close to the case suggests the plaintiffs are Elliott Associates, L.P., Elliott International, L.P., The Liverpool Limited Partnership, Perry Partners L.P., Perry Partners International, Inc., DE Shaw Valence International Inc., and York Capital Management Europe (UK) Advisors, LLP.
A statement from the investors explains the suit, though Porsche is insisting the claims are unjustified.
“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,” said the statement.
Meanwhile, Porsche spokesperson Frank Gaube rejected the notion of the suit calling it unjustified.
Volkswagen is wary of the situation as well. Porsche incurred about $13 billion in debt as a result of their failed 2008 takeover attempt, but lawsuits upheld the merger that happened a year later between the two companies. Volkswagen just seems to be waiting and hoping to avoid the maelstrom of investor anger spawned by the debacle.
[Source: Automotive News]