A group of investment funds Monday filed a lawsuit in the U.S. against German sports car maker Porsche Automobil Holding SE (PAH3.XE), its former chief executive Wendelin Wiedeking and former chief financial officer Holger Haerter seeking to recover more than $1 billion in losses related to Porsche's ill-fated takeover bid for Volkswagen AG (VOW.XE).

The complaint, which was filed in federal court in Manhattan, "explains in detail how Porsche SE manipulated the price of VW stock as it secretly accumulated control over almost all of VW's freely traded shares," the funds said in a joint statement.

The investment funds include Elliott Associates LP, Glenhill Capital LP and Perry Partners LP. The funds are represented by U.S law firm Bartlit Beck Herman Palenchar & Scott LLP.

"We haven't been informed about this lawsuit yet," a spokesman for Porsche in Stuttgart said, noting that the company "always acted according to capital market laws."

Porsche accumulated a stake of just over 51% in Volkswagen and controlled a complex set of stock options to boost its stake further. But the attempt to gain full control over Europe's largest automaker by sales backfired when credit markets turned sour amid the financial crisis and Porsche's net debt ballooned.

Porsche was effectively forced to abandon its takeover plan and agree to a merger, with Volkswagen in the driver's seat. The end of the power struggle between Porsche and Volkswagen triggered the departure of Wiedeking and Haerter.

During Porsche's takeover attempt, Volkswagen shares in October 2008 briefly soared to more than EUR1,000 a piece as short-sellers scrambled to cover positions after Porsche revealed that it had access to almost the entire free float of VW's outstanding shares. Many investors were wrong-footed by the announcement.

"Porsche released billions of euros worth of shares into the short squeeze for its own profit," the funds said, adding that "the defendants repeatedly misled investors and lied about Porsche SE's positions and intentions with respect to VW."

"Porsche SE should be held accountable in a court of law," said Phil Beck, a lawyer for the funds. "We will do whatever it takes to make sure the rule of law is upheld."

Porsche's disclosure policy during the takeover attempt and related movements of VW's share price have sparked scrutiny from German public prosecutors in Stuttgart. That investigation continues.

-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com
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