Background of the proceedings before the Regional Court of Braunschweig
In 2014, a lawsuit against Porsche Automobil Holding S.E. was tried before the Regional Court of Braunschweig, in which a shareholder sought compensation for damages. At its core, the allegation was that the defendant had breached its duties under capital market law by not providing adequate and timely public information regarding its strategic intentions about further share purchases in Volkswagen AG during the takeover speculations made public in 2008. The plaintiff claimed that he suffered significant financial loss as a result of the allegedly delayed publication of capital market-relevant information.
Legal situation and key considerations of the court
Requirements for ad hoc disclosure
The court had to determine whether the requirements for liability under Section 37b WpHG (old version, now Section 97 WpHG) were met. According to this provision, shareholders can claim damages from issuers or parent companies if insider information is omitted or published late and a causal loss has occurred. The key issue was whether Porsche Automobil Holding S.E. had breached its obligations through a failed or untimely ad hoc announcement, thus undermining market confidence.
The Regional Court of Braunschweig set out in detail that, at the relevant time, there was no obligation to publish an ad hoc announcement regarding a possible increase in the stake in Volkswagen AG. In particular, the court stated that any takeover intentions were merely internal, not yet finalized considerations, which could not be regarded as concrete, price-sensitive insider information within the meaning of the Securities Trading Act (WpHG).
Causality and attribution
A central issue for the court’s decision was the examination of the causal link. Even if an incorrect or delayed ad hoc announcement were assumed, a direct and causal connection between this breach and the alleged financial loss would have to be substantiated and proven. The court found that the plaintiff had neither substantiated nor proven that the alleged price movements could actually be attributed to a supposed breach of duty by the defendant regarding the ad hoc announcement.
Outcome of the lawsuit
The Regional Court dismissed the claim on the grounds that the legal prerequisites for liability for damages due to an alleged breach of ad hoc disclosure requirements were not met. Neither was there any insider information present during the relevant period, nor were the specific causality requirements for a claim for damages fulfilled. The ruling highlights the high standards required to enforce claims for damages based on allegedly omitted capital market information.
Significance for capital market communication in practice
Responsibility of issuers
For issuers of listed companies, the ruling provides important guidance on the interpretation and handling of ad hoc disclosure obligations. The duty to disclose information only arises when concrete, price-sensitive facts exist whose publication is capable of having a significant impact on the share price. As long as only internal preparations for decisions or as yet non-binding statements of intent exist, there is no immediate obligation to make an ad hoc announcement.
Requirements for asserting claims by shareholders
For investors, the decision means that damage claims for alleged breaches of capital market disclosure obligations require careful analysis. It is essential to substantiate which specific information behavior of the company is alleged to have led to what causally proven financial disadvantage. This underlines the importance of precise argumentation and evidence when asserting claims.
Developments in capital market law and outlook
In view of recent developments in European and German capital market law, such as through the Market Abuse Regulation (MAR) and the amendment of the WpHG, the issue of insider information and reporting obligations has come into greater regulatory focus. Case law demonstrates that courts take a differentiated approach in interpreting disclosure obligations, distinguishing between vague plans and actual factual circumstances.
Notice regarding legal assistance
The proceedings before the Regional Court of Braunschweig illustrate the complex relationships in the field of capital market disclosure obligations and their liability implications. If you have legal questions concerning this topic, the team at MTR Legal Rechtsanwalt will be happy to provide confidential clarification of your individual circumstances.
Source: Judgment LG Braunschweig, 5 O 4013/13, available at urteile.news.
