DETROIT - DaimlerChrysler AG said on Wednesday that investor Kirk Kerkorian's $8 billion lawsuit over the 1998 merger that formed the automaker should be thrown out because Kerkorian waited too long to file his claims that the "merger of equals" was actually a takeover.
In a motion for summary judgement that offered its most detailed defense yet, the world's fifth-largest automaker said it had sworn statements from 11 of the 13 former Chrysler directors who approved the merger backing DaimlerChrysler's motion to halt the lawsuit.
The lawsuit was filed by Kerkorian, and joined by other investors, after an October 2000 statement by DaimlerChrysler Chairman Juergen Schrempp that the $36 billion merger between Daimler-Benz and Chrysler Corp. had only been billed as a merger of equals for "psychological" reasons, and he had always intended Chrysler to be a division of DaimlerChrysler.
In a statement, Kerkorian's holding firm Tracinda Corp. called DaimlerChrysler's statements "gratuitous and irrelevent."
"The essential position put forth by DaimlerChrysler...is that Tracinda and the other shareholders should have discovered earlier that the transaction was not a merger of equals and that they had been intentionally deceived by Daimler-Benz and Mr. Schrempp," Tracinda said.
Both sides have been filing a stream of motions before a Delaware judge, who is expected to rule on motions for summary judgement this year.
Kerkorian claims Schrempp and Chrysler Chairman Bob Eaton dubbed the deal a "merger of equals," when in fact Schrempp was seeking to relegate Chrysler to a division of DaimlerChrysler.
But in addition to defending the accuracy of its statements, DaimlerChrysler said Kerkorian and his associates had little interest in how Chrysler would be goverened after the merger. It also said Kerkorian believed Daimler-Benz was offering the best price for Chrysler shares, and worried that a higher "buyout" price might cause the deal to fall through.
Citing many news reports between 1998 and 2000 rebutting the "merger of equals" language, including those surrounding the departures of several Chrysler executives, DaimlerChrysler also contends Kerkorian knew of the shift within the company, but did not care enough to take any action.
Kerkorian launched the lawsuit, which could lead to bad publicity for DaimlerChrysler if it goes ahead, just as Chrysler was slipping into the red in 2000.
Since then, DaimlerChrysler has pumped in at least 3.0 billion euros ($3.22 billion) into its U.S. business and sent German executives to oversee a turnaround. DaimlerChrysler shares have lost about two thirds of their value since the "merger made in heaven," as the company then described it, was announced.