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PORSCHE HOLDING SE: Delays in German Model Case Proceeding (KapMuG) en

Newsletter 03/2018

Around 400 independent claims have already been filed at the Lower Regional Court of Stuttgart alleging that Porsche Holding SE (‘Porsche’) failed to promptly disclose price sensitive information (ad-hoc duties) about its most prominent shareholding, i.e. its shares in VW. Porsche is a listed company with a majority stake of c.a. 52.2% in Volkswagen AG’s (‘VW’) ordinary shares.

Porsche’s preferred shares dropped by more than 30% in value when VW admitted it had installed defeat devices, which were designed to cheat emissions tests in certain car models. Interestingly, at the time of the emissions cheating there were many overlaps between the VW and Porsche boards (e.g. Martin Winterkorn was CEO of VW and Porsche from 2009 to 2015).

Porsche’s preferred shareholders may be entitled to compensation for their losses.

Unexpectedly, the Higher Regional Court of Stuttgart (Oberlandesgericht Stuttgart) has not yet named a model plaintiff and has therefore not officially set a German Model Case Proceeding (the so-called KapMuG-proceeding) in motion. KapMuG is designed to bundle similar or identical cases and to facilitate coherent court decision-making regarding related claims. By registering claims with the KapMuG-proceeding, investors can safeguard their rights until the Higher Regional Court has decided on the most relevant legal questions. Investors can then either file individual claims or participate in a settlement.
As far back as February 2017, the Lower Regional Court of Stuttgart (Landgericht Stuttgart) had issued a list of model questions to the Higher Regional Court of Stuttgart (Vorlagebeschluss), which then the Higher Regional Court of Stuttgart in the KapMuG proceeding decides on for all proceedings.

Deminor will register the claim of investors with KapMuG once opened for registration.

The delay in the Porsche KapMuG seemingly has two reasons: the first is a miscommunication between the Lower Regional Court and the Higher Regional Court. The Higher Regional Court expects the suspension of more cases before it wants to decide on the lead plaintiff. The Lower Regional Court is of the opinion that a sufficient number of cases has been suspended (including one with a claim value of around EUR 160 million) for the Higher Regional Court to make this decision. The second reason for the delay is that it is not entirely clear if the Higher Regional Court of Stuttgart has jurisdiction over the claim, as some argue that the VW KapMuG is dealing with the same legal issues and therefore, the Porsche KapMuG should be a part of the VW KapMuG in Braunschweig.

Yet, around 330 individual cases have not been suspended by the Lower Regional Court. These primarily concern foreign entities and before suspending the cases, the Lower Regional Court wants to have sufficient evidence for their existence, legal standing and representation – a time-consuming undertaking.

A decision on the model plaintiff by the Higher Regional Court of Stuttgart is expected in the next weeks.

Once the lead plaintiff is named and published in the German bulletin (Bundesanzeiger), we at Deminor will register our clients’ claims with the Porsche KapMuG.


Felix von Zwehl

Written on March 16, 2018 by

Felix von Zwehl

General Counsel Germany

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