By on March 2, 2016

1.6 TDI Motor ( EA 189 ):  Flow straightener 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.

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16 Comments on “Not So Fast With That Lawsuit, Guys: Volkswagen...”


  • avatar
    CoreyDL

    “Look, we gave you a cookie cutter for your peanut butter cookies, what else do you want? Are you suing us because you hate cookies?”

    -VAG

    • 0 avatar
      VoGo

      “We’re just trying to help you by publishing the obvious truth which is that suing us will only fail. Your welcome, cookie-hater!”

    • 0 avatar
      seth1065

      Dear Vag
      Once again you fail to understand the US market, trying to give me peanut butter cookies. Do you not know most of the US is peanut free? It is bad enough when I drop young Seth at school I get the death stares from the other parents parents about killing the environment but god forbid I send in a PB cookies. Once again your tone deaf.

  • avatar
    SCE to AUX

    “Volkswagen claims they were as shocked as anyone”

    That depends on who speaks for ‘Volkswagen’.

    • 0 avatar
      NickS

      True. Many of those “anyone”s went publicly on record that they notified VW of the road test results nearly two years before Sept 2015.

      One has to wonder if that innocence from VW can be backed up with any evidence. That posturing can prove ruinous as some kind of legal strategy (much like dismissing and doubting US regulator questions for a whole year).

      If they can weasel out with these types of excuses it will be on narrow and obscure technicalities, like the one where they argue that privacy laws protect internal email communications.

  • avatar
    hf_auto

    I thought they had been warned years in advance? Shouldn’t be too difficult to make the connection between “your cars are illegal” and falling stock prices.

    Keep up the good work VW.

    • 0 avatar
      Lou_BC

      It has been publicly known for years that their cars are crap and that did not hurt share prices so why should running afoul of the EPA be any different ?

  • avatar
    Steve Biro

    You know, it almost doesn’t matter. The VW dealership near me has folded… despite being owned by a regional auto group with other franchises to support it. I wonder how much this is happening in other parts of the country… or how close to failure other VW stores may be. I don’t think, in a broad sense, that VW is glong to get away with this regardless of the outcome of any lawsuits.

    • 0 avatar
      05lgt

      Why would a VW dealership close just ahead of the massive influx of recall repair work? Even if the rates VAG pays aren’t as profitable as their usual service work, I’m sure that a VW dealer’s service dept. will find *something* that needs fixing at the higher, customer paid rates. Sales just drive customers to the profit centers of service, F&I, and used car transactions. I’m sure it’s lean now, but those cookie cutters aren’t going to cut and mark PB cookie dough by themselves.

      • 0 avatar
        Storz

        I don’t think its going to be a massive influx of recall repair work, I think its going to be a massive influx of cars that are bought back by VW.

        • 0 avatar
          Steve Biro

          That and reduced demand for new VWs due to the scandal. Many people I know have had their doubts about modern VWs for years and now definitely wouldn’t touch one with a 10-foot poll.

  • avatar
    jthorner

    What did we expect VW’s lawyers to say?

    “Yeah, you angry shareholders are right, we lied to you and everyone else.”

  • avatar

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

    • 0 avatar

      VW traces the scandal back to 2005, when it decided to launch diesel engines in the US.
      http://www.autocar.co.uk/car-news/industry/vw-emissions-scandal-vw-knew-defeat-device-may-2014

      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.

  • avatar
    Sobro

    It’s the Sergeant Schultz defense. Fitting.


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