Porsche gets multi-billion US lawsuit thrown out

31st December 2010, Comments 0 comments

German sportscar maker Porsche said Friday a US court has thrown out a lawsuit brought by US hedge funds claiming more than two billion dollars in damages over its failed 2008 attempt to acquire Volkswagen.

The US District Court for the Southern District of New York granted Thursday Porsche's motion to dismiss the complaints in the Elliott Associates and Black Diamond actions in their entirety, Porsche said in a statement.

A total of 39 plaintiffs had accused Porsche of not coming clean about its intention in 2008 to acquire VW, Germany and Europe's biggest automaker, and of having manipulated the market.

Porsche caught investors by surprise in October 2008 when it said it had built up a 75-percent stake in VW, causing violent swings in VW's share price and at one point making it the world's biggest company by market value.

Speculators, including hedge funds, who had bet VW shares would fall were forced to cover their positions at enormous cost.

Porsche was later caught out by the global economic crisis and ended up abandoning its bid for VW, which turned the tables last year and bought nearly half of Porsche's equity. VW plans to acquire the rest by 2011.

The plaintiffs have 30 days to file an appeal, the German firm added.

© 2010 AFP

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