July 19, 2017 / 7:36 PM / 2 months ago

U.S. judge allows VW bondholder suit to continue

A Volkswagen logo is pictured at the newly opened Volkswagen factory in Wrzesnia, Poland, September 9, 2016. REUTERS/Kacper Pempel/File Photo

WASHINGTON (Reuters) - A federal judge in California on Wednesday allowed some claims to proceed by bondholders who sued Volkswagen AG (VOWG_p.DE) over its diesel emissions scandal, but agreed to the German automaker’s request to dismiss parts of the lawsuit.

U.S. District Judge Charles Breyer said in a 31-page order he was allowing a suit against VW and then-Chief Executive Officer Martin Winterkorn to go forward from institutional investors who bought bonds from the German automaker in 2014 and 2015.

The ruling is similar to a decision from Breyer in June allowing a suit to proceed from plaintiffs who invested in VW through American Depositary Receipts, a form of equity ownership in a non-U.S. company that represents the foreign shares of the company held on deposit by a bank in the company’s home country.

Winterkorn resigned days after the scandal became public and much of the company’s management has changed since 2015. VW in September 2015 admitted using sophisticated secret software in its cars to cheat exhaust emissions tests and pleaded guilty in March in a U.S. court to three felonies in connection with the scandal.

Volkswagen spokeswoman Jeannine Ginivan said the automaker ”believes the remaining claims are without merit, which we intend to make clear as this case proceeds.”

The company has agreed to spend as much as $25 billion in the United States to resolve claims from owners and regulators over polluting diesel vehicles and has offered to buy back about 500,000 vehicles.

Reporting by David Shepardson; Editing by Peter Cooney

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