Don't be surprised if we see a Kerkorian/Iacocca buy-back of Chrysler from
Daimler in the future....
JERRY J BROWARSKI wrote:
> 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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