Friday, April 29, 2005

Kerkorian refuses to give up fight

Billionaire appeals rejection of claim that he was defrauded in DaimlerChrysler deal.

By Ed Garsten / The Detroit News

Kirk Kerkorian Kerkorian won't quit Kirk Kerkorian and his company are appealing the federal judge’s ruling that he was not fooled into supporting the 1998 merger of Chrysler Corp. and Daimler Benz AG. Should he continue the fight? Yes, to the last appeal No, give it up Get results and comments Error processing SSI file Juergen Schrempp Comment on this story Send this story to a friend Get Home Delivery

Lawyers for billionaire Kirk Kerkorian and his company, Tracinda Corp., appealed a federal judge's ruling that he was not fooled into supporting the 1998 merger of Chrysler Corp. and Daimler Benz AG that created DaimlerChrysler AG.

Kerkorian, the former Chrysler Corp.'s biggest share holder, sued DaimlerChrysler and Chairman Juergen Schrempp, saying he was led to believe the combination of the German and American automakers would be a "merger of equals," but that it turned out to be a takeover.

Under a takeover, Chrysler shareholders would have been entitled to a higher premium for their shares, Kerkorian contends.

Kerkorian's appeal, filed with the U.S. 3rd Circuit Court of Appeals in Philadelphia, disputes U.S. District Judge Joseph Farnan's determination that governance of the new company could change after the merger was completed.

"If that's going to be the law...the investment community should know and the employees in Detroit should now and the whole world should know that representations made publicly and in a proxy or in meetings only have to last a moment in time," Tracinda attorney Terry Christensen said in an interview.

Kerkorian filed his suit in 2000 after Schrempp was quoted in the Financial Times and Barron's as saying he intended all along for the deal to be a takeover.

In a 123-page ruling issued April 7, Judge Farnan rejected Kerkorian's claims that he was duped, saying he was a "sophisticated investor" and that "Kerkorian supported the merger before he had any discussions with anyone about corporate governance."

The ruling came 14 months after the case went to trial in Wilmington, Del.

While disputes over the facts of the case are not fodder for appeal, Christensen said he'll focus on Farnan's "application of law."

Michael Schell, an attorney for the New York firm representing DaimlerChrysler, doubted the chances of success for Tracinda's appeal.

"The U.S. District Court found no factual or legal basis for Tracinda's claims and an appeal will not change that," Schell said in a written statement. "Apart from devastating Tracinda's case, we think the opinion is virtually bullet-proof."

In its filing Thursday, Tracinda's attorneys further appealed Judge Farnan's November 2003 ruling that favored DaimlerChrysler in denying Tracinda a jury trial.

You can reach Ed Garsten at (313)223-3217 or egarsten@detnews.com