Shareholder lawsuits: model proceedings against VW Holding begin

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In the dispute over possible claims for damages by shareholders of the VW holding company Porsche SE (PSE) in connection with the diesel scandal, the long-awaited test case begins on Wednesday at 10 a.m. at the Stuttgart Higher Regional Court. The plaintiffs are of the opinion that the Stuttgart-based PSE informed them too late about the financial consequences of the affair. The holding rejects the allegations.

In essence, it should now be clarified from a legal point of view which side is right – this also involves the special role of the PSE. Although this is the main shareholder of VW, it does not have its own operational business. According to the court, the process is likely to drag on until at least winter. Because the OLG assumes a greater public interest, the kick-off event will not take place at the court headquarters in downtown Stuttgart, but in the Filderhalle in neighboring Leinfelden-Echterdingen.

VW has equipped millions of engines with software to manipulate the measurement of pollutant emissions. The scandal was triggered by an investigation by the US environmental agency.

The plaintiffs argue that – in ignorance of the extent of the diesel scandal – they paid too much money for their PSE shares years ago. Their argumentation: If VW and then Porsche SE had informed the markets about the diesel scandal earlier, it would have depressed the share price earlier and they would have had to pay less for their shares. It is also in dispute whether and under what circumstances PSE, as VW parent company, was even obliged to publish mandatory stock market notifications about price-relevant transactions at Volkswagen. The PSE insists that the complaints are “manifestly unfounded”. It is a holding company and not a car manufacturer, which is why it was not involved in the development, manufacture or sale of suspicious diesel engines.

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Investor model proceedings have been running at the Braunschweig Higher Regional Court since September 2018 as to whether VW itself should have informed its shareholders earlier about the financial consequences of the diesel scandal. In view of largely similar facts, the OLG Stuttgart initially rejected a separate procedure for the role of the Porsche Holding. But the Federal Court of Justice overturned this decision in mid-2020 and justified the fact that the Braunschweig proceedings were about public capital market information from Volkswagen, while in Stuttgart it was about Porsche SE. The fact that processes at VW are indirectly important in both proceedings is not decisive.

The OLG has declared a British fund to be the model plaintiff, which is making a claim of 5.7 million euros. In addition, there are other plaintiffs as so-called parties to the proceedings, so that the claims for damages total 8 million euros. However, the total is only a fraction of the claims in the high three-digit million range against the PSE that have already been brought before the courts, since by no means all plaintiffs are actively participating in the test case. The OLG is not negotiating the amount of individual claims anyway – instead, it is about the question of whether the plaintiffs are in principle entitled to money at all.


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