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DaimlerChrysler settles class action case over merger

DaimlerChrysler will pay the plaintiffs $300 million (approximately €275 million). The firm has applicable insurance policies aggregating about $220 million, from which it will seek reimbursement. The plaintiffs' initial claim was $22 million. Despite settling out of court, DaimlerChrysler maintains that the class action was “completely without merit”. The group adds that its decision to settle this case has no bearing on the separate case brought by Kirk Kerkorian of Tracinda Corporation, a former 14% shareholder in Chrysler Corp. However, Kerkorian's case for $13 billion-worth of damages is still thought likely to go to trial in December. DaimlerChrysler contends that Mr. Kerkorian could not have been misled about the terms of the merger between Daimler-Benz and Chrysler Corp. because he was privy to details of the thanks to information available to him from a former Tracinda employee James Aljian, who was a Chrysler director and later a member of DaimlerChrysler's shareholder committee. As well facing DaimlerChrysler's continued defence, The Financial Times has reported that Kerkorian may be at the receiving end of a suit from an unnamed Chrysler investor, who reportedly alleges that Tracinda Corp. sold Chrysler shares after receiving insider information from a Chrysler director.

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