The Volkswagen Group (“VW”), headquartered in Wolfsburg, Germany, is one of the world’s leading automobile manufacturers and the largest carmaker in Europe. VW’s shares are primarily traded on the Frankfurt Stock Exchange. On 20 September 2015 Volkswagen admitted that it had installed so-called ‘defeat devices’ to cheat emissions tests in various car models sold in the United States from 2009, a scandal also dubbed ‘Dieselgate’. This was followed by another admission on 22 September 2015 that the same device had been installed in 11 million cars worldwide. In the two days following these revelations the stock price fell by almost 30%.
On 16 September 2016 a group of investors advised and assisted by Deminor Recovery Services commenced legal proceedings against Volkswagen AG with the aim of recovering losses suffered on their shares following Dieselgate. The proceedings before the Lower Regional Court of Braunschweig in Germany are currently suspended while a so-called model case proceeding (KapMuG) takes place before the Higher Regional Court of Braunschweig. The aim of the KapMuG is to determine liability of VW for all related proceedings.
Court documents and other official documents released by US authorities show that VW knew about the pending investigations from mid-2014 and that the company admitted to the breaches on 3 September 2015. It can therefore not be ruled out that VW’s senior management knew about the installment of defeat devices at a much earlier point than 20 September 2015, the day on which VW informed the market of its emissions scheme.
The investors filed a claim to seek compensation for losses suffered on their purchase of Volkswagen securities. The auto manufacturer’s failure to correctly inform them about the use of defeat devices in various car models in a timely manner led to severe consequences for the company’s financial situation, i.e. its current earnings and future outlook.
Three lawsuits have been filed against VW by Deminor on behalf of more than 200 investment funds and a number of private investors. Investors represented by Deminor have collectively suffered losses of hundreds of millions of euros due to Volkswagen’s stock price tumble following the revelation of Dieselgate.
Two of the cases filed by Deminor have already been consolidated with the KapMuG by the Higher Regional Court of Braunschweig, and the latest proceeding filed in December 2018 is expected to be consolidated with KapMuG shortly.