- The Washington Times - Monday, December 1, 2003

WILMINGTON, Del. (AP) — Daimler-Benz executives engaged in “plain, old-fashioned fraud” during merger talks with Chrysler five years ago, an attorney representing billionaire investor Kirk Kerkorian told a federal judge yesterday.

“Because of the lies, defendants were able to take over Chrysler, drive out the senior leaders at Chrysler and replace them with Daimler executives from Germany,” Terry Christensen, who represents Mr. Kerkorian’s Tracinda Corp., said during opening arguments in U.S. District Court.

The trial that began yesterday is the culmination of a three-year battle between Tracinda and German-American automaker DaimlerChrysler AG. Tracinda is seeking $1 billion in compensatory damages and an unspecified amount of punitive damages.

DaimlerChrysler says the 1998 merger was one between equals, a trans-Atlantic union that created a global automotive giant. Tracinda says the deal was a secret takeover, orchestrated to bilk shareholders out of billions in compensation.

“DaimlerChrysler AG is a merger of equals, and it always has been,” Jonathan Lerner, an attorney for the automaker, said in his opening argument.

He said Mr. Kerkorian always knew what was going on with the company and with changes in the staff, but didn’t do anything until the price of his stock began falling.

“This case is about DaimlerChrysler’s sagging stock price and a major investor who sat on his stock too long,” Mr. Lerner said.

The trial will feature testimony from the reclusive Mr. Kerkorian and top executives of DaimlerChrysler, including chairman Jurgen Schrempp. Also set to testify is former Chrysler Corp. chairman Robert Eaton, a central figure in the deal’s negotiations.

The trial is expected to last about two weeks.

Mr. Kerkorian, who was not present in court yesterday, sued DaimlerChrysler in 2000 after the London-based Financial Times quoted Mr. Schrempp as saying that he never meant for the 1998 merger to be one of equals and that the deal was billed that way “for psychological reasons.”


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