Got this from my son today. It's a bit long but should be of interest to
all Mopar enthusiasts.
Jerry Browarski
Subject: Kerkorian hits back!
Tracinda Sues
DaimlerChrysler and Juergen
Schrempp for Fraudulently Inducing
Vote of Chrysler Shareholders and
Misrepresenting Chrysler Acquisition as
a "Merger of Equals"
Mon Nov 27 20:15:00 2000 GMT
LOS ANGELES, CA--(BUSINESS WIRE)--November 27,
2000--Tracinda Corporation today filed a federal lawsuit
in the U.S. District
Court in Delaware against DaimlerChrysler AG (NYSE: DCX)
and senior
DaimlerChrysler executives, including Chairman and Chief
Executive Juergen
Schrempp, for fraudulently inducing the 1998 vote of
Chrysler shareholders
and knowingly deceiving the Securities and Exchange
Commission, Chrysler's
Board of Directors, Tracinda and other Chrysler
shareholders through false
representations that Daimler-Benz's transaction with
Chrysler was a "merger
of equals." Tracinda, Chrysler's largest shareholder,
would not have agreed to
vote for the transaction had it known Daimler-Benz's true
intention was to
acquire and subjugate Chrysler, reduce it to division
status and fire Chrysler's
management.
According to Terry Christensen of Christensen, Miller,
Fink, Jacobs, Glaser,
Weil & Shapiro, LLP, who is representing Tracinda in the
lawsuit, Tracinda
seeks over $2 billion in actual damages (including the
acquisition premium
denied it by the pretense of a merger of equals) and over
$1 billion in
rescissory damages (representing the drop in value of the
DaimlerChrysler
shares exchanged for Tracinda's Chrysler stock). Tracinda
also seeks punitive
damages of at least $6 billion to punish the defendants
for defrauding all
Chrysler shareholders and the investing public at large.
In addition, Tracinda
seeks to unwind the transaction so that Chrysler will once
again be an
independent corporation owned by Chrysler shareholders.
The lawsuit alleges that in May 1998, executives of
Daimler-Benz falsely
represented to Chrysler and Tracinda that a combination of
Daimler-Benz and
Chrysler would be a "merger of equals" in which existing
Chrysler
management would jointly manage the combined entity on a
worldwide basis
and be responsible for U.S. operations. This commitment to
a "merger of
equals," also contained in the merger agreement and
DaimlerChrysler's
registration statement, was essential to Tracinda's
agreement to vote all of its
shares for the transaction. In turn, Tracinda's agreement
in advance to vote all
of its shares for the merger was cited by Chrysler in its
proxy statement as a
material factor in the Chrysler Board's endorsement of the
transaction and
recommendation to shareholders to vote for it.
According to an interview in the October 30, 2000 issue of
the Financial
Times, Schrempp admitted he had lied in 1998 to get
Chrysler to agree to a
business combination with Daimler-Benz. He admitted in the
interview that he
always intended to control Chrysler and operate it as a
division, but he
recognized that Chrysler would not agree to do the deal if
it knew his true
intentions, so he concealed them.
"Tracinda has been a major investor in Chrysler since
1990, and has always
believed in its growth potential," said Terry Christensen.
"Since the merger of
Daimler and Chrysler in November 1998, the value of
Tracinda's stock in the
combined entity has fallen by more than half. This massive
decline in
shareholder value has coincided with Mr. Schrempp's
subjugation of Chrysler
into a subordinate role and his purge of Chrysler's own
long-time executives,
which has demoralized Chrysler employees and dealers
throughout North
America. We believe that Mr. Schrempp's carefully
calculated lies have
inflicted grievous financial damage on Tracinda and other
Chrysler
shareholders which should be remedied by the Court."
Tracinda alleges that defendants knew their
representations to Tracinda and
others were false and misleading at the time they were
made and that
Daimler-Benz senior management never had any serious
intention of forming a
"merger of equals" with Chrysler. Rather, they had already
decided to take full
control of Chrysler, to reduce or eliminate the influence
of Chrysler
management on the affairs of DaimlerChrysler, to relegate
Chrysler to the
subordinate role of a division and to conceal this secret
objective from
Tracinda, other shareholders, Chrysler management and the
rest of the
investing world until the defendants had completed their
plan.
Tracinda was Chrysler's largest shareholder with a 13.75%
ownership
position at the time that the business combination
agreement was signed by
Daimler-Benz and Chrysler. It is now DaimlerChrysler's
third largest
shareholder with approximately 33 million shares, or an
approximately 4%
ownership position. Tracinda is wholly owned by Kirk
Kerkorian.
Copyright © 2000 Business Wire. All rights reserved.
Rick Browarski
Field Application Engineer
Infineon Technologies Corporation
248-735-3722
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