DaimlerChrysler Heads to Court Over '98 Merger

It seems to me that when Chrysler agreed that Daimler would have more seats than Chrysler on the new board they effectively gave control of the new company to Daimler and it
is a company's responsibility to run a company as they see fit and to change strategy whenever they feel it will do some good.
Here is the link:
http://www.nytimes.com/2003/11/28/business/28auto.html
and part of the story:
In one corner will be Kirk Kerkorian, the billionaire Las Vegas casino operator and the largest shareholder of the premerger Chrysler. Mr. Kerkorian is suing DaimlerChrysler because he contends company officials misrepresented the 1998 transaction as a "merger of equals" that would lead to two semiautonomous companies, one German and one American.
Instead, he says, DaimlerChrysler has become a German company and the struggling Chrysler division is run by executives dispatched from DaimlerChrysler's corporate headquarters in Stuttgart.
In the other corner will be the mastermind of the deal, Jrgen E. Schrempp, the chairman of DaimlerChrysler. He is being compelled to testify by a recent court ruling.
A major piece of evidence will be an audiotape of a 2000 interview that Mr. Schrempp gave to The Financial Times of London. In the article based on the interview, Mr. Schrempp is quoted as saying that he never intended the deal to be a merger of equals; his company's lawyer said his comments were misconstrued.
Mr. Kerkorian is seeking $1 billion to $2 billion in compensatory damages, Mr. Christensen said.
"He is a big boy," said J. Michael Schell, the lead lawyer for DaimlerChrysler. "He had a huge investment here. He's had investments in other companies. He's had experience with hostile takeovers and forcing his way on boards, including Chrysler's itself. He's been around all of the corporate games in the last 20 years, and he had eyes and ears on the Chrysler board in addition to his sophistication."
http://www.nytimes.com/2003/11/28/business/28auto.html
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This is fascinating, because Kirkorian was trying to sue the former Chrysler board for not distributing the Company's pre-98 cash on hand in the form of dividends. He claimed the board was hoarding the cash, or some such nonsense, whereas the board had the money earmarked for product development & other matters, which were most likely a sweetener for any potential buyout suitors.
Difference here was that before the merger, Chrysler made money and sold cars, afterwards they haven't. Either it was a case of the penny coming due, or gross mismanagement on the part of Jerkin Shrimp and his merry band of men at Daimler Benz. I think Kirkorian, scum bag that he is, has a very good case here and this is a space that should be watched very closely. If DC's 2004 Chrysler "Division" new products are flops or only moderate successes, the "division is gone, and with it may go MB for quite some time. Chrysler was by no means in the desperate condition Rover was when BMW foolishly bought that mess, but Chrysler appears to have been living on borrowed time. The facts MAY come out in court, but probably not. Remember, this isn;t a pursuit of the truth, but just a "dash for the cash".

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