( On the bright side, he still has 9 billion )
April 08, 2005
DaimlerChrysler wins $1.2bn legal fight
By Mike Verdin, Times Online
Kirk Kerkorian, the fighter pilot who became the world's 41 richest
man, has lost a claim for $1.2 billion (£640 million) against
DaimlerChrysler over the mechanics of the German-US carmaker's
formation in 1998.
Mr Kerkorian's four-year battle for compensation, on grounds that
Daimler had through deception gained Chrysler on the cheap, ended in
failure when a Delaware court ruled that the billionaire's legal team
had "failed to prove its claims of common law fraud".
The verdict was welcomed by DaimlerChrysler, which said: "We have
always maintained there is no merit to the case. We will continue to
concentrate our efforts on making this merger a great success."
Tracinda, Mr Kerkorian's investment vehicle, through which the case
was brought, said that it was "clearly disappointed" with the judgment.
However, Tracinda added that it was "pleased" that other
DaimlerChrysler shareholders who had lodged comparable lawsuits had won
compensation. The carmaker agreed in August 2003 to pay $300 million to
settle a $22 billion class-action lawsuit brought by other investors
who claimed they were misled over the tie-up.
Tracinda has claimed that, while Daimler claimed that its $36 billion
tie-up with Chrysler was a merger of equals, it was in fact a takeover
in disguise. Jeurgen Schrempp, the DaimlerChrysler chief executive,
said in an interview in 2000 that he always meant Chrysler to be a
"division" of the merged group, and for Germans to dominate senior
A takeover would have required a higher price to have been paid to
Chrysler shareholders, of which Tracinda was the largest one.
However, the court found that "the corporate governance issues,
including the 'merger of equals' label, the selection of the German
AG form, and the voting status of members of the management, were not
significant to Tracinda".
Mr Kerkorian, a Second World War fighter pilot who made fortunes in
aviation and casinos, said after the verdict: "The Americans were
laughed at in the German Board meetings for having agreed to become a
"Daimler management marvelled at the success of their project blitz and
the takeover of an American icon."
Mr Kerkorian was ranked 41, with an estimated fortune of $8.9 billion,
in this year's Forbes list of the world's richest people.