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DaimlerChrysler wins lawsuit

DaimlerChrysler has won a court case filed by former investor Kirk Kerkorian, which accused the carmaker of lying to shareholders during the 1998 merger that created the group.

The suit stated that DaimlerChrysler had falsely described the deal as a merger rather than a takeover, which Kerkorian said had cheated him out of an acquisition fee.

A takeover of Chrysler would have cost Daimler-Benz far more, Kerkorian said.

Kerkorian's suit was filed in the US District Court in Delaware on Monday by the investment firm Tracinda Corporation, of which he is sole owner.

District Judge Joseph Farnan ruled in favour of DaimlerChrysler on yesterday after the trial, which concluded in February 2004.

"Although the Chrysler/Daimler-Benz merger was a transaction completed on the open market, the dealings of the companies with Tracinda occurred on a one-to-one level," Farnan wrote in a 124-page opinion.

"After considering the evidence adduced at trial, including the testimony of Kerkorian and other Tracinda representatives, the Court finds that the corporate governance issues, including the 'merger of equals' label, the selection of the German AG form, and the voting status of members of the management, were not significant to Tracinda," wrote Farnan.

DaimlerChrysler chairman Jurgen Schrempp said the court's decision confirmed "once and for all, that the Tracinda case lacked any merit and that all claims against DaimlerChrysler relating to the 1998 merger were completely baseless".

DaimlerChrysler agreed in August 2003 to pay $300 (£160.4m) to settle a $22bn (£11.7bn) class-action lawsuit filed by other investors who also claimed they were misled.



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