Just a month after the whole scandal about Volkswagen cheating on its emission tests broke, the company is once again facing more trouble. This time, the German car manufacturer is going to be facing sixty-six institutional investors who have decided to take legal action against the company and its practices. Based on reports, the first claim will be made within the following week.
The capital market model claim will be filed by Nieding and Barth, a German law firm company. This claim can be comparable to the collective lawsuit claim usually filed in the US. The claim is scheduled to be filed within the week on behalf of a US institutional investor that has encountered a massive loss from the car manufacturer. A lawyer for the law firm announced the news to the media but failed to disclose who the plaintiff is.
Once the claim has been filed, the law firm expects that the other 65 investors will be joining in. As a matter of fact, they are currently working with other firms MüllerSeidelVos and Robbins Geller Rudman and Dowd. Together, they will be representing the investors in filing the claim against Volkswagen.
By taking things further and filing a legal complaint against the car manufacturer, the parties involved hope that it will add pressure on Volkswagen. Earlier this month, the car company announced that its annual sales from last year has dropped significantly. This is the first time this has happened to the company in over a decade.
Ever since the US's Environmental Protection Agency revealed Volkswagen's practice in cheating on its US emissions tests, the company and its investors have been dealing with heavy losses. According to the EPA, Volkswagen fitted their vehicles with what they called a "defeat device" which was designed to bypass the standards of the test.
Before the EPA revealed their scam, Volkswagen has been recognized as the second largest car manufacturer in the world. After the scandal broke, however, billions of euros have been wiped clean off of its brand value. Apart from that, they are facing a number of class action lawsuits outside of its home market.
