Bondholders File Proposed Class Action Against Volkswagen AG
Reuters, CNBC, The New York Times, Pensions & Investments, Law360, Automotive News
June 21, 2016
Thomas A. Dubbs discusses newly filed class action against Volkswagen AG
On behalf of Boston Retirement System, a public pension fund for Boston municipal employees, Labaton Sucharow filed the first bondholder's proposed class action against Volkswagen AG related to the company's diesel emissions scandal. The lawsuit, which also names as defendants Volkswagen Group of America Inc and Volkswagen Group of America Finance Inc, claims that "false and misleading statements and omissions" by Volkswagen caused its bonds to trade at "artificially inflated prices..., only to decline after the emissions scandal went public."
The lawsuit, filed in U.S. District Court for the Northern District of California, seeks to recover damages for bondholders who purchased bonds between May 23, 2014, and Sept. 22, 2015, in sales that raised more than $8 billion for Volkswagen.
Thomas A. Dubbs, a partner at Labaton Sucharow said, “At the same time that Volkswagen was deceiving U.S. investors and regulators with its rigged emissions systems, it was raising billions of dollars from investors in the U.S. capital markets."
He added, “The Boston pension fund has decided to open up an avenue of recovery for all public pension funds and other investors in Volkswagen 144-A bonds." The Firm is in discussions with a number of pension plan sponsors about their participation in this action, which is not subject to prohibitions against legal action regarding foreign issuers of securities, Dubbs said.