The state court began hearing evidence on Monday in a case brought by 24 international hedge funds, led by New York-based Glenhill Capital, against Porsche SE.

According to the court, the funds were seeking damages to tune of 1.36 billion euros ($1.85 billion) from Porsche SE, the holding company that used to own a majority of the German luxury carmaker of the same name.

The lawsuit is part of a legal campaign being waged by hedge funds against Porsche SE, seeking to recoup money which they lost from betting on the share price of the German carmaker Volkswagen in 2008.

In March 2008, the hedge funds speculated on a falling share price after Porsche SE had dismissed talk of an imminent takeover of VW as speculation. But, seven months later, Porsche disclosed that it had acquired 75 percent of its German carmaking rival, causing VW shares to spike. As a result, the hedge funds absorbed huge losses as they were forced to close out their negative bets, or short positions.

In the court case, the hedge funds have accused Porsche SE of securities fraud by making deceptive public statements. They argue that the holding company should have disclosed its VW position much earlier. According to Porsche SE, the allegations are unfounded.

In December 2012, an appeals court in Manhattan dismissed a case brought by the hedge funds, ruling that the US state of New York was the wrong jurisdiction to bring such a lawsuit, and that Germany would be more appropriate. Since then, the funds have pressed charges against Porsche in Stuttgart, Hanover, Frankfurt and Braunschweig, all in Germany.

Porsche SE's attempt to buy the much bigger VW eventually backfired and pushed it to near-bankruptcy. As a result, Volkswagen fully acquired Porsche SE's sports car business in 2012.

uhe/mkg (Reuters, AFP, dpa)