Attention: TDR Forum Junkies I thought you guys would be interested in this.
DETROIT (AP) via NewsEdge Corporation -
Billionaire investor Kirk Kerkorian has filed a $9 billion lawsuit against DaimlerChrysler AG, accusing chairman Juergen Schrempp with lying to Chrysler shareholders about the 1998 merger.
The lawsuit, filed in Delaware by the Kerkorian-owned Tracinda Corp. , accuses executives of Daimler-Benz of making ``false representations'' that the combination with Chrsyler Corp. was ``a merger of equals. ''
Tracinda Corp. said the suit seeks to unwind the $34 billion deal. It claims that it would have never voted for the deal if it had been presented as a takeover of Chrysler by the Germany company.
Kerkorian is DaimlerChrysler's third-largest individual shareholder.
``To close one of the largest transactions in the history of the automotive industry, defendants Daimler-Benz AG and DaimlerChrysler AG blatantly lied to all concerned in a scheme masterminded by defendant Juergen Schrempp,'' the complaint said, according to a copy obtained by The Detroit News.
In a statement, Tracinda cited comments Schrempp made recently to the Financial Times that he never intended DaimlerChrysler to be a merger of equals, but instead secretly planned to make Chrysler a division of the German parent company.
``Defendants always intended to relegate Chrysler to the status of a division, always intended to fire Chrysler's management and always intended to replace them with executives from their headquarters in Stuttgart,'' Kerkorian's complaint said.
Kerkorian seeks over $2 billion in actual damages, $1 billion in damages for the drop in value of the DaimlerChrysler shares since the merger and punitive damages of at least $6 billion. Tracinda also said it ``seeks to unwind the transaction so that Chrysler will once again be an independent corporation owned by Chrysler shareholders. ''
More than a dozen senior Chrysler executives have resigned, retired, or been forced out since the deal was finalized in November 1998. On Nov. 17, Chrysler president James Holden was fired by Schrempp and replaced by Dieter Zetsche, a veteran Mercedes-Benz executive.
Besides Daimler-Benz, DaimlerChrysler and Schrempp, the suit filed in U. S. District Court in Delaware also names as defendants Manfred Gentz, the company's chief financial officer, and Hilmar Kopper, the chairman of its supervisory board, the News said.
Before the merger, Kerkorian was often at odds with Chrysler management over the direction of the company, culminating with a $23 billion bid in 1995 to buy Chrysler. That bid failed, but in return for peace Kerkorian was given a seat on Chrysler's board.
Since the merger, the value of DaimlerChrysler's shares has dropped steadily, reaching an all-time low of $37. 90 after Holden's ouster and Zetsche's appointment earlier this month.
Shares were trading at $41. 50, up $1. 27 on the New York Stock Exchange, but nearly 55 percent below DaimlerChrysler's post-merger high of $108. 62.
DETROIT (AP) via NewsEdge Corporation -
Billionaire investor Kirk Kerkorian has filed a $9 billion lawsuit against DaimlerChrysler AG, accusing chairman Juergen Schrempp with lying to Chrysler shareholders about the 1998 merger.
The lawsuit, filed in Delaware by the Kerkorian-owned Tracinda Corp. , accuses executives of Daimler-Benz of making ``false representations'' that the combination with Chrsyler Corp. was ``a merger of equals. ''
Tracinda Corp. said the suit seeks to unwind the $34 billion deal. It claims that it would have never voted for the deal if it had been presented as a takeover of Chrysler by the Germany company.
Kerkorian is DaimlerChrysler's third-largest individual shareholder.
``To close one of the largest transactions in the history of the automotive industry, defendants Daimler-Benz AG and DaimlerChrysler AG blatantly lied to all concerned in a scheme masterminded by defendant Juergen Schrempp,'' the complaint said, according to a copy obtained by The Detroit News.
In a statement, Tracinda cited comments Schrempp made recently to the Financial Times that he never intended DaimlerChrysler to be a merger of equals, but instead secretly planned to make Chrysler a division of the German parent company.
``Defendants always intended to relegate Chrysler to the status of a division, always intended to fire Chrysler's management and always intended to replace them with executives from their headquarters in Stuttgart,'' Kerkorian's complaint said.
Kerkorian seeks over $2 billion in actual damages, $1 billion in damages for the drop in value of the DaimlerChrysler shares since the merger and punitive damages of at least $6 billion. Tracinda also said it ``seeks to unwind the transaction so that Chrysler will once again be an independent corporation owned by Chrysler shareholders. ''
More than a dozen senior Chrysler executives have resigned, retired, or been forced out since the deal was finalized in November 1998. On Nov. 17, Chrysler president James Holden was fired by Schrempp and replaced by Dieter Zetsche, a veteran Mercedes-Benz executive.
Besides Daimler-Benz, DaimlerChrysler and Schrempp, the suit filed in U. S. District Court in Delaware also names as defendants Manfred Gentz, the company's chief financial officer, and Hilmar Kopper, the chairman of its supervisory board, the News said.
Before the merger, Kerkorian was often at odds with Chrysler management over the direction of the company, culminating with a $23 billion bid in 1995 to buy Chrysler. That bid failed, but in return for peace Kerkorian was given a seat on Chrysler's board.
Since the merger, the value of DaimlerChrysler's shares has dropped steadily, reaching an all-time low of $37. 90 after Holden's ouster and Zetsche's appointment earlier this month.
Shares were trading at $41. 50, up $1. 27 on the New York Stock Exchange, but nearly 55 percent below DaimlerChrysler's post-merger high of $108. 62.
