M
MoPar Man
I know that not much seems to be happening with this soap opera.
What I haven't heard anywhere, though, is the result of a proxy sent
out to DCX shareholders last December that outlined the details of an
out-of-court settlement arrangement.
I believe the proxy was designed to force shareholders (either
specifically Kerkorian or perhaps everyone else BUT Kerkorian) to
accept the settlement regardless of how (or if) Kerkorian's suit goes.
See my post titled "Chrysler is mailing Out-of-court settlement docs
to shareholders" posted on Jan 2/04 for details.
--------------
Daimler 'merger of equals' claim a fraud - Kerkorian
26 April 2004
http://www.stuff.co.nz/stuff/0,2106,2888457a6026,00.html
DETROIT: Pressing his claim for more than $US1 billion ($NZ1.6
billion) in damages, Las Vegas casino mogul Kirk Kerkorian insisted on
Friday that the so-called "merger of equals" that created
DaimlerChrysler was a fraud.
Trial proceedings in the case brought against the German-American
automaker by Kerkorian's Tracinda Corp. investment arm ended in
February in the US District Court in Delaware.
But his lawyers summed up his arguments, and a litany of securities
law and common law fraud claims, in an 86-page briefing paper filed
with the court on Friday.
They asked the court to enter a judgment against the defendants, led
by DaimlerChrysler Chief Executive Juergen Schrempp, in the amount of
$US1.35 billion plus interest, and whatever punitive damages, costs or
fees are deemed appropriate.
The defendants acted with "evil motive, malice and reckless disregard
for Tracinda's rights", Kerkorian's attorneys said.
Kerkorian was Chrysler's largest shareholder in 1998 when Germany's
Daimler-Benz joined with America's Chrysler to form the world's
fifth-largest automaker. He contends that Schrempp only pitched the
deal as a merger rather than a takeover to lower the transaction price
and avoid paying investors a "control premium".
"The evidence in this case – almost all of which comes from the
defendants themselves – establishes exactly what Tracinda told the
court it would prove, that defendants falsely portrayed the
transaction as a "merger of equals," Kerkorian's lawyers said.
"The evidence also shows that one result of these misrepresentations
was that no control premium was paid to Chrysler shareholders by
Daimler," they added.
"Quite simply, defendants used the `merger of equals' storyline
purposely to mislead Chrysler executives, the Chrysler board of
directors, Chrysler shareholders, the United States Securities and
Exchange Commission and the public in order to profit themselves."
Kerkorian's suit was sparked by comments Schrempp made in a
wide-ranging interview with The Financial Times in October 2000, when
he said he always intended to make Chrysler a "division" of
DaimlerChrysler.
Kerkorian's attorneys said those comments, and other similar remarks
Schrempp made to Barron's, were part of the "overwhelming evidence"
that the German auto boss and his lieutenants "deliberately planned
and systematically executed the fraud about which Schrempp boasted".
A trio of high-ranking former Chrysler executives led by Robert Eaton,
who was the company's chairman when it linked up with Daimler,
testified as witnesses for the defense in the DaimlerChrysler merger
trial. But Tracinda contended in its briefing that they benefited
greatly through the consummation of one of the biggest deals in
automotive history.
Eaton alone received more than $US94 million in DaimlerChrysler stock,
cash payments and severance package payments, Tracinda said. He also
received stock appreciation rights, once the deal was done, on more
than 2.5 million DaimlerChrysler ordinary shares, it said.
In its own post-trial briefing, a 169-page document filed with the
court on Friday, DaimlerChrysler urged dismissal of the case,
essentially saying it was without merit.
It also said "the phrase `merger of equals' is a term used vaguely to
describe a whole range of possible transactions" and could not be
material as a matter of law.
Regardless of how Schrempp and others billed the business combination
agreement, DaimlerChrysler's attorneys added that the 35 premium paid
to Chrysler shareholders was "fair and appropriate even if the
transaction had been labeled an acquisition."
Judge Joseph Farnan, who heard the DaimlerChrysler merger trial
without a jury, is not expected to rule for at least several months.
What I haven't heard anywhere, though, is the result of a proxy sent
out to DCX shareholders last December that outlined the details of an
out-of-court settlement arrangement.
I believe the proxy was designed to force shareholders (either
specifically Kerkorian or perhaps everyone else BUT Kerkorian) to
accept the settlement regardless of how (or if) Kerkorian's suit goes.
See my post titled "Chrysler is mailing Out-of-court settlement docs
to shareholders" posted on Jan 2/04 for details.
--------------
Daimler 'merger of equals' claim a fraud - Kerkorian
26 April 2004
http://www.stuff.co.nz/stuff/0,2106,2888457a6026,00.html
DETROIT: Pressing his claim for more than $US1 billion ($NZ1.6
billion) in damages, Las Vegas casino mogul Kirk Kerkorian insisted on
Friday that the so-called "merger of equals" that created
DaimlerChrysler was a fraud.
Trial proceedings in the case brought against the German-American
automaker by Kerkorian's Tracinda Corp. investment arm ended in
February in the US District Court in Delaware.
But his lawyers summed up his arguments, and a litany of securities
law and common law fraud claims, in an 86-page briefing paper filed
with the court on Friday.
They asked the court to enter a judgment against the defendants, led
by DaimlerChrysler Chief Executive Juergen Schrempp, in the amount of
$US1.35 billion plus interest, and whatever punitive damages, costs or
fees are deemed appropriate.
The defendants acted with "evil motive, malice and reckless disregard
for Tracinda's rights", Kerkorian's attorneys said.
Kerkorian was Chrysler's largest shareholder in 1998 when Germany's
Daimler-Benz joined with America's Chrysler to form the world's
fifth-largest automaker. He contends that Schrempp only pitched the
deal as a merger rather than a takeover to lower the transaction price
and avoid paying investors a "control premium".
"The evidence in this case – almost all of which comes from the
defendants themselves – establishes exactly what Tracinda told the
court it would prove, that defendants falsely portrayed the
transaction as a "merger of equals," Kerkorian's lawyers said.
"The evidence also shows that one result of these misrepresentations
was that no control premium was paid to Chrysler shareholders by
Daimler," they added.
"Quite simply, defendants used the `merger of equals' storyline
purposely to mislead Chrysler executives, the Chrysler board of
directors, Chrysler shareholders, the United States Securities and
Exchange Commission and the public in order to profit themselves."
Kerkorian's suit was sparked by comments Schrempp made in a
wide-ranging interview with The Financial Times in October 2000, when
he said he always intended to make Chrysler a "division" of
DaimlerChrysler.
Kerkorian's attorneys said those comments, and other similar remarks
Schrempp made to Barron's, were part of the "overwhelming evidence"
that the German auto boss and his lieutenants "deliberately planned
and systematically executed the fraud about which Schrempp boasted".
A trio of high-ranking former Chrysler executives led by Robert Eaton,
who was the company's chairman when it linked up with Daimler,
testified as witnesses for the defense in the DaimlerChrysler merger
trial. But Tracinda contended in its briefing that they benefited
greatly through the consummation of one of the biggest deals in
automotive history.
Eaton alone received more than $US94 million in DaimlerChrysler stock,
cash payments and severance package payments, Tracinda said. He also
received stock appreciation rights, once the deal was done, on more
than 2.5 million DaimlerChrysler ordinary shares, it said.
In its own post-trial briefing, a 169-page document filed with the
court on Friday, DaimlerChrysler urged dismissal of the case,
essentially saying it was without merit.
It also said "the phrase `merger of equals' is a term used vaguely to
describe a whole range of possible transactions" and could not be
material as a matter of law.
Regardless of how Schrempp and others billed the business combination
agreement, DaimlerChrysler's attorneys added that the 35 premium paid
to Chrysler shareholders was "fair and appropriate even if the
transaction had been labeled an acquisition."
Judge Joseph Farnan, who heard the DaimlerChrysler merger trial
without a jury, is not expected to rule for at least several months.