(Reuters) - A New York state court rejected a motion by Porsche Automobil Holding SE to dismiss a $1.4 billion-plus lawsuit brought by 26 hedge funds alleging fraud and unjust enrichment stemming from the company's trading in Volkswagen voting shares in 2008, Porsche said late on Wednesday.
Porsche SE said it continued to believe the damage claims were without factual and legal merit, adding it would appeal the decision.
"Porsche SE also continues to maintain that the New York Supreme Court is not an appropriate forum for the resolution of the hedge funds' alleged claims, and that their claims should be heard in Germany, where several of these funds have brought claims against Porsche SE," the company said in a statement.
Analysts often argued Porsche SE was more of a hedge fund than a carmaker since most of its profits were made from substantial derivative positions in VW voting shares in the years leading up to its near collapse.
A growing gap in the value of VW ordinary shares versus its preferred shares in 2007 and 2008 aroused the interest of hedge funds, which began borrowing stock to bet heavily that the valuations would narrow.
In late October 2008, Porsche SE triggered a massive short squeeze, sending voting shares in VW soaring to over 1,000 euros each at one point after it revealed it had effectively cornered the market in the ordinary shares.
(Reporting By Christiaan Hetzner; Editing by Steve Orlofsky)
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