Winterkorn Not Worried About Billion Euro Porsche Lawsuits. Or So He Says
After plans failed to sue Porsche in America, where juries are impressionable and awards are rich, the lawsuits are now in Germany, where courts are cautious, and where professional judges need to be convinced. The wheels of justice crank slowly.
“We are optimistic regarding the outcome of the proceedings,” Martin Winterkorn, CEO of Porsche SE and Volkswagen, told Reuters at the holding company’s annual general meeting. According to the wire service, “planned hearings of three lawsuits pushing over 4 billion euros of damages stalled at a German court on April 17 after the presiding judge said a court specializing on cartel matters may need to be commissioned to handle the main 2 billion-euro case.Two other lawsuits were postponed until Oct. 30 after the lawyer for the plaintiffs fell ill. That day, three more cases are due to be heard at the court in the northern German city of Braunschweig.”
Plaintiffs say that Porsche SE lied about its plans to take over Volkswagen. Trusting claims that Porsche is not interested, hedge fonds and private investors shorted the stock. When it became known that Porsche SE controlled 42.6 percent of VW’s common shares and held options for another 31.5 percent of the stock, a giant short trap opened and the Volkswagen share soared to of 1,000 Euro as investors frantically bought the stock they had borrowed
Eventually, Porsche became a victim of the credit crunch, the leveraged buyout failed, and Volkswagen took over Porsche.
"Eventually, Porsche became a victim of the credit crunch, the leveraged buyout failed, and Volkswagen took over Porsche." Not to forget the German Federal governments and Lower Saxony State government, which failed to respect EU law by not abandoning the VW-Gesetz. This law provides the state of Lower Saxony with veto rights despite only being a minority shareholder. Thus, Porsche had no chance to achieve a factual majority over Volkswagen, which would have allowed them to access Volkswagen's cash hoard and finance the takeover.