The Stichting Volkswagen Investors Claim (“the Foundation”), a non-profit organization established under the law of the Netherlands, is pleased to inform you of the opportunity to pursue recovery of investment losses on securities of Volkswagen AG (“VW” or the “Company”), Porsche AG, Audi AG, and affiliated companies, following VW’s admission to manufacturing cars with devices intended to manipulate emissions test results. Through the Foundation, investors may be able to recover for losses on VW, Porsche, and Audi securities purchased from April 23, 2008 up to and including the date on which the full extent of the Volkswagen emissions fraud shall become known to the public.
We believe that the Foundation is a mechanism by which both VW and its current and former investors can resolve the wave of global litigation now engulfing the Company.
A “stichting” is a foundation created under the Dutch Civil Code to represent the interests of victims and resolve claims in the form of a binding collective settlement. A stichting can bring legal proceedings in its own name in a Dutch court in the interest of its participants without subjecting participants to any financial risk. Stichtingen (the plural of stichting) have already achieved landmark global settlements in matters concerning Royal Dutch Shell plc, in which a stichting negotiated a recovery for participants’ losses on shares traded on various exchanges across Europe, and Converium Holding AG, in which a stichting achieved settlement of claims even though neither the defendant nor the stichting’s interest group members were Dutch.
The power of a stichting to negotiate effective settlements is the product of both the stature of the individuals appointed to its board and to the number and diversity (representativeness) of its participants. The Foundation has already assembled an extraordinarily distinguished management and supervisory board (“the Board”) to oversee our operations:
- Roger Ganser, Chairman of the World Federation of Investors (“WFI”);
- Wilfred Hübscher, lawyer and former Chief Executive Officer of the Berlin Stock Exchange;
- Dr. Henning Wegener, former Ambassador of the Federal Republic of Germany and past Secretary General of the Asociación Española de Accionistas Minoritarios de Empresas Cotizadas (AEMEC) – The Spanish Association of Minority Shareholders of Listed Companies, Member of the Board of European Federation of Investors and Financial Services Users (BetterFinance former EuroFinuse);·Javier Cremades, Founder and Senior Partner of international law firm Cremades Calvo Satelo; and
- Arie van der Steen, accountant and professional board member of several claim foundations in the Netherlands.
- Guillaume Prache, Managing Director of BETTERFINANCE
The Board also has retained three firms for legal counsel, funding, and advice. AKD is one of the largest and best-regarded firms in the Netherlands, while the award-winning Austrian firm, Breiteneder Rechtsanwälte Attorneys at Law, specializes in European Collective Redress, investor protection, securities litigation, and capital markets law. The Foundation is funded and advised by Labaton Sucharow LLP, a premier American securities, antitrust, and consumer protection law firm.
On behalf of the Foundation, these firms are also working with attorneys from Spain, Italy, France, Germany, the UK, and other European and Non-European countries. Many of these law firms belong to the International Financial Litigation Network (“IFLN”), a leading global network of attorneys specializing in collective redress cases. The efforts of the Foundation are being supported by the WFI, a worldwide, non-profit organization whose members include 55 national shareholder associations. During its recent annual congress 2015 in Milan, Italy, the members of the WFI unanimously expressed their consent to the WFI’s support of the Foundation. The Foundation will continue to grow its support base and has entered talks with many other interest groups.
The Foundation follows a strict “no-cure-no-pay” arrangement with participating investors. Investors join the Foundation completely free of charge. The Foundation will be able to obtain repayment of costs only in the event of a successful settlement. By contract with the Foundation, counsel and the funder will seek no more than 18 percent of any settlement achieved through the Foundation. This is much less than has been typical of funders of stichtingen in the past. Moreover, the Foundation is legally bound to use best efforts to seek payment of these fees and funding expenses directly from VW in addition to the amount of any settlement.
The Foundation is aware of other initiatives in the market whereby investors are being prompted to undertake action with the argument that their claims are due to expire soon. Based on a recent change in the law, there is disagreement regarding the limitations period applicable to these claims. In any event, it is the intention of the Foundation to inform its participants of important developments so that participating investors may preserve their claims. If it becomes appropriate, the Foundation may facilitate participation in other initiatives (in particular a possible KapMuG procedure based on German law) at a lower percentage of recovery to Foundation participants.
The Foundation has served a claim letter to VW requesting that the Company negotiate a reasonable settlement in the best interest of all investors in VW securities—former and present—without resorting to litigation. We believe that the Company will ultimately view this as the best possible resolution to its multifaceted, international legal exposure to investors’ claims.
Such broad resolution is not possible for investors or the Company by any other mechanism. For instance, German group actions prosecuted in Germany under the Capital Market Investors’ Model Proceeding Act (“KapMuG”), some of which are presently being proposed, notoriously take an extraordinary amount of time to litigate, if they are resolved at all. There is no other proven class or group mechanism in the European Union, and even U.S. investors cannot pursue claims under U.S. federal securities laws to recover losses on securities traded on non-U.S. exchanges under the Supreme Court’s holding in Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010).
In order to pursue its objectives and to establish that the Foundation is representative of injured investors worldwide, the Foundation is assembling a sophisticated and geographically diverse coalition of investors to join and support its efforts, which is essential to the VW Investors Claim’s success. Among other things, the Foundation seeks assistance in (i) promoting the Foundation and its efforts; (ii) securing the active support of investors; and (iii) providing general advice and expertise to investors with respect to the efforts of the Foundation. Investor associations are proving to be instrumental in facilitating the necessary support for the Foundation while also advancing the interests of their members who suffered investment losses resulting from the Volkswagen emissions fraud. The Foundation invites selected investor associations to enter into a Partner Agreement with the Foundation to formalize a mutually beneficial relationship in the pursuit of redress for damaged investors.