Hedge funds that want $1.4 billion in damages from Porsche after it attempted to take over Volkswagen but came up short may be out of luck.
The case seeking reparation for Porsche's botched takeover of Volkswagen in 2008 will likely be dismissed, said a Reuters report.
"On balance it's our view that we consider the lawsuit, or the appeal, to be unpromising for several reasons," Gerhard Ruf, judge at the higher regional court in Stuttgart, told Reuters today before a hearing of the hedge funds' case.
"We are inclined to dismiss the case," he said.
Today's appeal came from 19 plaintiffs; the case launched a year ago by firms including Viking Global Investors, Glenhill Capital and Greenlight Capital was brought by two dozen hedge funds and dismissed in a separate Stuttgart court.
The hedge funds have accused Porsche of masking a scheme to buy Volkswagen. Porsche denied that it was attempting to take over Volkswagen, but in late 2008, the automaker revealed that it held 74.1 percent of VW's common stock, leaving it just shy of the threshold required for an acquisition, Reuters reported.
Following Porsche's reveal, Volkswagen shares rose and the company was eventually able to absorb Porsche as a VW brand.
"There is no evidence whatsoever suggesting that short-sellers were deliberately misled," said Markus Meier of law firm Hengeler Mueller, which represents Porsche, as quoted by Reuters.
In other news, Volkswagen plans to promote Matthias Mueller, head of Porsche, to its management board next week, a source familiar with the matter told Reuters.
VW operates with a two-tier board structure where a supervisory board similar to a board of directors oversees appointments to the management board.
The German auto group also comprises the Lamborghini, Bentley, Audi, Bugatti and Skoda brands.
Volkswagen and Porsche declined to comment to Reuters on the report that Mueller would be promoted.
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