Not So Fast With That Lawsuit, Guys: Volkswagen

Steph Willems
by Steph Willems
not so fast with that lawsuit guys volkswagen

An anticipated multi-billion dollar lawsuit from disgruntled Volkswagen shareholders is without merit, the embattled German automaker said on March 2.

A document made public by Volkswagen states that the suit, which alleges a violation of disclosure obligations under capital markets law, is doomed to fail following an examination by legal experts from both inside and outside of the company.

News of the shareholder lawsuit emerged in mid-January after Volkswagen stocks tumbled precipitously in the wake of the diesel emissions scandal that engulfed the automaker last September. Reportedly, thousands of investors were lined up to demand a pound — or several — of Volkswagen’s warm, soft flesh.

The document asserts that while Volkswagen feels it is in the clear (on this charge, at least), an outside law firm will tackle the thorny legal matter of the emissions defeat device installed in its diesel vehicles for the past several years. It also included another official apology, something that has now become standard daily practice in Wolfsburg:

The Company emphasizes that this examination does not replace the independent investigation for the complete clarification of the diesel matter which is being conducted by the law firm Jones Day and is ongoing. The Company is making this public announcement to correct the selective and incomplete publication of documents in the media about the diesel matter and to avoid having partial excerpts of its statement of defense published in the media. Notwithstanding this, Volkswagen deeply regrets the incidents related to the diesel issue.

In order for Volkswagen to be be liable for financial losses under such a lawsuit, the company would have to have had prior knowledge of facts that were relevant to the stock price.

Volkswagen claims they were as shocked as anyone when word reached them of the Environmental Protection Agency’s allegations of violation of federal emissions laws on Sept. 18, 2015.

Until that point, Volkswagen argues “there were no indications whatsoever of information with relevance for the stock price,” given that they were already anticipating a recall of a half-million vehicles and significantly lower associated fines.

As the controversy continues its slow plod forward — and its sales continue their fast slide downward — Volkswagen says they’ll release the preliminary findings of their own investigation in the second half of April.

Join the conversation
3 of 16 comments
  • Voyager Voyager on Mar 03, 2016

    Hmm, the day before yesterday the BBC reported that CEO Winterkorn knew about the fraudulent software long before he said he did.

    • Voyager Voyager on Mar 03, 2016

      VW traces the scandal back to 2005, when it decided to launch diesel engines in the US. VW says that after internal and external legal examinations it “confirms its belief that its management board duly fulfilled its disclosure obligation under German capital markets law”. As such, VW believes that lawsuits from shareholders to be “without merit, since any ad hoc disclosure obligation requires that the persons responsible for the fulfillment of this obligation obtain knowledge of facts relevant for the stock price and can assess the economic effects of those facts”. That sounds like erecting a building using materials of which the real estate co. knows that they will not pass examination by authorities, and selling it off to investors. I would not go as far as stating that VW's arguments sound very much like the typical German excuse, used after WW2, "Wir haben es nicht gewusst"... (while they in fact did). But it is painfully close. If German prosecutors don't intend to go after VW managers like Winterkorn, the American Justice Dept. should.

  • Sobro Sobro on Mar 03, 2016

    It's the Sergeant Schultz defense. Fitting.

  • Dukeisduke I don't like how they've changed their nameplates and font from the Star Trek-ish LEXUS, to L E X U S, kinda like VW's lettering on the back of the T A O S, or those stick-on letters you can buy at the parts store that people use to their own names on the back of their cars.
  • Dukeisduke So, the screen goes blank for two-tenths of a second, every once in a while - what could go wrong?
  • Dukeisduke "Hello, IT. Have you tried turning it off and on again?"(Roy in The IT Crowd)
  • Dukeisduke Just Say No To Bugs!
  • Dukeisduke So, avoid calcium? You're going to increase osteoporosis, among other things.