Bavaria to File Lawsuit against Volkswagen for Pension Fund Losses
And another group of investors looks to scrap whatever it can from the brandby Robert Moore, on
The whole Dieselgate scandal has done a number on Volkswagen financially. Despite my harsh words for the company in the past over the scandal, I’m starting to feel bad about for it. It’s been hit for billions here in the U.S., and there are more lawsuits coming down the pipe than I can shake a stick at. The most recent suit is coming from within the company’s home country from the state of Bavaria, but it’s nowhere near as bad as some of the suits.
According to Reuters, the lawsuit will be filed in September and is supposed to recover at least a portion of the €700,000 that the state’s pension fund lost when the scandal went public, and stock prices plummeted. This isn’t the only suit of this type. Norway’s sovereign wealth fund has filed a similar suit along with a fairly large group of individual investors too. Each suit has a different reason or purpose, but it’s like the blows just keep coming for the German automaker.
So far, the U.S. has nailed the company pretty harshly, and South Korea has also taken efforts to claim some of VW’s cash. Even individual states within the U.S. have also filed similar suits. As far as Bavaria goes, the lawsuit seems rather slim compared to some, but something tells me it isn’t the last suit we’ll be seeing. At this point, one really has to wonder: Is everyone going to sue VW straight into bankruptcy?
Why it Matters
I know I’ve openly bashed VW for this scandal in the past, but at this point, I think the lawsuits are starting to get ridiculous. These lawsuits aren’t about righting VW’s wrongs; these suits are all about greed and everyone’s want to get as much as they can out of the company. It’s not that I don’t think the investors aren’t owed some kind of restitution, but they are all investors, and the fact of the matter is that investors sometimes lose money. Now, I know they have lost money because VW did something illegal, but I still don’t think it’s necessarily right for investors to get all of their losses back. Investing is a risky business, and they are the ones who trusted VW to do the right thing. Regardless of what VW did, you took the risk, and I think you should suffer the loss. All these suits are doing now is making it harder and harder for the automaker to pull itself out of this very deep hole.