Porsche SE's actions were not deliberately aimed at damaging the financial positions held by Glenhill, Viking and other hedge funds, the State Court in Stuttgart, Germany, announced Monday.

Describing the charges of fraud brought against the holding company of the German sports carmaker as unsubstantiated, the court also threw out their claim for damages to the tune of 1.36 billion euros ($1.89 billion).

The decision lays to rest a lawsuit brought by altogether 12 hedge funds that suffered massive losses in a so-called short squeeze, when VW stock skyrocketed unexpectedly by several hundred percent, much to the chagrin of those who had placed negative bets on the company.

In March 2008, the hedge funds speculated on a falling VW 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 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 accused Porsche SE of securities fraud by making deceptive public statements. They argued that the holding company should have disclosed its VW position much earlier.

In December 2012, an appeals court in Manhattan already dismissed the hedge funds' suit, ruling that the US state of New York was the wrong jurisdiction, and that Germany would be more appropriate. Since then, the funds have pressed charges against Porsche in the German cities of Stuttgart, Hanover, Frankfurt and Braunschweig.

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/kms (Reuters, dpa)