( On the bright side, he still has 9 billion )
Engineering
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 (=A3640 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 positions.
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 German corporation.
"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.