Lawsuits against Wolfgang Porsche and Ferdinand Piëch, who is also chairman of Volkswagen AG (ETR:VOW) (FRA:VOW) (OTCMKTS:VLKAY), just won’t go away. Despite the fact that a New York court threw out a $1.4 billion claim in 2012 against the two for stock manipulation and lying to investors, seven hedge funds just won’t let it go.

Wolfgang Porsche

Basis for the suit

The seven funds continue to accuse Porsche Automobil Holding SE (ETR:PAH3) (FRA:PHA3) (OTCMKTS:POAHY) and its management of misleading the market before the 2008 disclosure that Porsche was looking to take control of Volkswagen AG (ETR:VOW) (FRA:VOW) (OTCMKTS:VLKAY), a company considerably larger than itself.

Seven hedge funds, including Elliott Management have filed a €1.8bn lawsuit against Porsche’s chairman and another board member, in the latest legal tussle related to the carmaker’s failed takeover bid for Volkswagen.

The hedge funds accuse Porsche Automobil Holding SE (ETR:PAH3) (FRA:PHA3) (OTCMKTS:POAHY) and its management of misleading the market in the run-up to its disclosure in late 2008 that it was seeking to take control of Volkswagen, its much larger peer. VW is actually fifteen times the size of Porsche.

The most recent suit was filed in Frankfurt, Germany over the weekend. What’s a touch odd about the suit is that the “same” suit seeking the same amount of damages was filed in Hanover, Germany in 2012.

Both men are grandsons of founder Ferdinand Porsche, each expects to be supported by the company, which described the action as “a trial tactic” and “without merit”.

Porsche defends the two

In a statement today, Porsche SE, a holding company said that the newest suit does not include anything new and that the men will “will resort to all legal means to defend themselves against this lawsuit”.

Additionally the statement said that, “Porsche SE confirms that all press releases the company published during the period in dispute are truthful.”

At the heart of both pending suits is the contention that while Porsche began buying stock options in Volkswagen while repeatedly denying that it any interest in acquiring the company. As a result, a number of funds were left wrong-footed based on a perceived strength of these denials. As a result, some investors took to shorting Volkswagen.

In March 2008, Porsche SE dismissed as “speculation” talk that it intended to take over VW. Seven months later Porsche SE revealed it held 42.6 percent of VW’s common shares as well as controlling another 31.5 percent via financial instruments. Unfortunately, Porsche couldn’t find the capital to finish the acquisition.

When the extent of the options that Porsche Automobil Holding SE (ETR:PAH3) (FRA:PHA3) (OTCMKTS:POAHY) purchased came to light in 2008, shares of Volkswagen skyrocketed as funds began rushing to cover their short positions. At the acme of irony in this case is that due to a slowdown in the automotive industry and the financial crisis, Volkswagen AG (ETR:VOW) (FRA:VOW) (OTCMKTS:VLKAY) ultimately ended up controlling Porsche after it acquired a stake in the larger company.

Glenhill Capital LP, David Einhorn’s Greenlight Capital LP and Chase Coleman’s Tiger Global LP led the suit that was thrown out of a New York court in 2012 due to the fact the judge felt it needed to be filed in Germany. Apparently, it needs to be filed twice in Germany.