DaimlerChrysler struck back at disgruntled billionaire investor Kirk Kerkorian last week, stating in court filings that Kerkorian and his Tracinda Corp. supported the union of Chrysler Corp. and Daimler-Benz AG as a "merger of equals."
The DaimlerChrysler filings maintain that Kerkorian, one of Chrysler Corp.'s largest shareholders at the time of the merger, backed the deal before the proposed merger was publicly announced in May 1998 and opposed seeking a higher selling price for Chrysler.
DaimlerChrysler's most recent filings respond to a lawsuit filed in November 2000 by Kerkorian and Tracinda, contending the 1998 union was not a "merger of equals" as represented but a takeover by Daimler-Benz.
"By early March, Tracinda already had concluded the proposed business combination was 'compelling'," DaimlerChrysler says in a prepared statement.
In a statement last week, Tracinda described DaimlerChrysler's statements as "gratuitous and irrelevant allegations."
DaimlerChrysler's statement cites a March 4, 1998, memo to Kerkorian and Chrysler director and Tracinda executive James Alijan. In the memo, Tracinda vice chairman Jerry York concludes the "situation is compelling to do the merger'' and "now is the time to do it," the DaimlerChrysler statement says.
DaimlerChrysler also claims that in sworn testimony Kerkorian admits that the combination agreement represented a "merger of equals." Kerkorian's lawsuit maintains that Juergen Schrempp, DaimlerChrysler chairman, misled investors and intended to control Chrysler.
"The essential position put forth by DaimlerChrysler in its motion 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 DaimlerBenz and Mr. Schrempp," Tracinda says in its statement.
Tracinda, a Los Angeles investment firm wholly owned by Kerkorian, faces a March 17 deadline to respond to DaimlerChrysler's motion for summary judgment in the case, which is being heard in U.S. District Court in Wilmington, Del.