LONDON, June 21, 2016 /PRNewswire/ --
Bentham Europe announces that Quinn Emanuel yesterday filed the first of two suits in Germany against Volkswagen AG. Together, these two suits will seek damages on behalf of hundreds of institutional funds. The total value of the claims filed yesterday is very significant indeed with shareholders having collectively lost many hundreds of millions of euros. The shareholders' claims relate directly to the material share price fall experienced by Volkswagen AG in the week commencing Monday 21 September 2015, upon its disclosure of a long-running practice of installing "defeat device" software in its diesel-powered vehicles exposing the company to substantial fines in the United States and elsewhere. The shareholders represent a true cross section of the investor base of Volkswagen AG, from sovereign wealth funds and international asset managers on the one hand to significant public pension funds,multinational company pension plans and foundations on the other.In addition to the funds that are currently participating, Bentham Europe is in discussions with a very large number of additional funds and international asset managers. In total, the expectation is that the claims to be advanced by the whole group will ultimately run into the billions of euros.
Jeremy Marshall, Chief Investment Officer of Bentham Europe, said on the filing of the suit: "The filing represents the culmination of the work of many months but is merely the first step in the campaign. We have been struck throughout by the depth of feeling that exists against Volkswagen's admitted practices and its recent reaction to its self-inflicted crisis. The breadth of the shareholder base that is represented by Quinn Emanuel should be a wake-up call to Volkswagen AG that it needs to engage with shareholders now, resolve matters and concentrate on regaining its market share."
Dr. Nadine Herrmann, the managing partner of Quinn Emanuel's Hamburg office who is leading the suit in Germany, said "Our clients in this litigation are serious investors who care deeply about good corporate governance and functioning capital markets. We are pleased that they placed their trust in us and indeed the German courts hearing this important case. If there ever was a corporate scandal where courts must vindicate the information rights of capital market investors it is this one and we are confident that we will convince the courts to award the damages our clients are justly owed."
The views of the shareholders are best summed up by Brian Bartow, General Counsel and Chief Compliance Officer of the California State Teachers' Retirement System (CalSTRS), who said, on filing,"Companies must be held accountable when they engage in such widespread deliberate deceit which destroys shareholder value, damages their reputation and harms the public. As a long-term shareholder, CalSTRS has serious concerns about Volkswagen's internal controls, governance and oversight by the Board. This action seeks to recover not only CalSTRS's economic losses to the pension fund, but, ultimately, to implement much needed corporate governance reforms going forward at Volkswagen."
Bentham will issue a further press release when the second suit is filed in Germany.
Notes to Editors:
Bentham Ventures is funding the shareholder action in Germany. Bentham Ventures is a joint venture between IMF Bentham Limited (IMF), established in 2001 in Australia and now the world's most experienced and successful litigation funder, and subsidiary entities of funds managed by Elliott Management Corporation (Elliott), a US-based investment advisory firm, and its affiliates. These funds have billions of U.S. dollars in funds under management globally. IMF and Elliott jointly guarantee Bentham Ventures' funding obligations to litigants (including adverse cost exposure).
Bentham Europe is a wholly owned subsidiary of Bentham Ventures which identifies, evaluates and recommends funding opportunities to the joint venture.
Bentham Ventures is currently funding shareholder litigation in England against Tesco PLC and investigating a number of further group actions at this time.
The litigation in Germany funded by Bentham Ventures will proceed in two waves. The second wave will be filed over the next three months and will be filed on behalf of a significantly larger group of well-known asset managers and investors. Quinn Emanuel will shortly be filing a model case application on behalf of the investor group. Other steps in the litigation will be taken over the next few days.
Bentham Europe is still coordinating the second wave of the litigation, and invites investors who wish to participate to indicate their interest by 30 July 2016 otherwise there is no guarantee that their claims can be advanced. The recent publications by the Braunschweig Court in the German Bundesanzeiger (re model case questions posed in some of the already pending cases) are silent on limitation issues. The degree of urgency that has to some extent been injected into the proceedings relates to the Court's statements in its press release accompanying those publications. The Court announced in its press release of 25 May 2016 that it would make a decision referring the model case questions to the Braunschweig appellate Court by August 2016 (at the earliest).
Those claims and model case applications that are not on file by August 2016 will, of course, not have an impact on the Court's potential decision. Claimants who file a claim only after a referral decision will still participate in the model case proceedings, but they essentially have to accept the proceedings as they are at the point they join. This includes a decision on the selection of the model claimant that may be made as early as shortly after the referral decision. It is therefore advisable to file the claim before or around the time that the Court makes its referral decision. The situation is relevant for our investor group because we will want to pose questions in the model case application that have particular relevance to our group and we want our investors to be in control of the model case application in so far as we can be. We certainly want our investors to influence the way that the Court approaches its task.
The California State Teachers' Retirement System was established by law in 1913 to provide retirement benefits to California's public school educators from prekindergarten through community college. Today, CalSTRS is the largest educator-only pension fund in the world, and the second largest pension fund in the U.S. The market value of the CalSTRS Investment Portfolio was approximately$188.8billion as of May 31, 2016.
