DaimlerChrysler labels class-action blackmail

27th May 2004, Comments 0 comments

27 May 2004 , STUTTGART - German-American automotive concern DaimlerChrysler has reacted angrily to new suits filed against it in the United States over the terms of the Daimler and Chrysler merger in 1998, with a spokesman using the term "blackmail". The response came after New York law firm Milberg Weiss Bershad and Schulman announced that two class action suits had been filed at a US court in the state of Delaware on behalf of shareholders living outside the United States. The suits, against the company

27 May 2004

STUTTGART - German-American automotive concern DaimlerChrysler has reacted angrily to new suits filed against it in the United States over the terms of the Daimler and Chrysler merger in 1998, with a spokesman using the term "blackmail".

The response came after New York law firm Milberg Weiss Bershad and Schulman announced that two class action suits had been filed at a US court in the state of Delaware on behalf of shareholders living outside the United States.

The suits, against the company and against 11 leading executives, including chairman Juergen Schrempp, alleges that shareholders were misled about the actual terms under which Daimler and Chrysler joined up together.

At the time, the companies called it a merger between equals, but the plaintiffs regard it as actually having been a takeover of Chrysler by Daimler, in which case Chrysler shareholders would have stood to gain a substantial bonus for their shares.

The accusation largely matches the core issue in the pending lawsuit before the Delaware court filed by US investor Kirk Kerkorian. In that case, Schrempp testified several times to reject allegations about investors being misled.

The verdict on the Kerkorian suit is expected sometime in the final quarter of this year.

In Stuttgart, a spokesman rejected the allegations and said there was nothing new contained in them.

"This is nothing other than a suit with a blackmail-like tendency," the spokesman said. He said the new class action suits amounted to "getting a free ride" from the Kerkorian case.

The class action suits apparently represent those foreign shareholders who came away empty-handed from a June 2003 claims settlement of USD 300 million (EUR 248 million) paid by DaimlerChrysler to American investors. The court ruling in that case expressly excluded foreign investors from the settlement.

DPA

Subject: German News

 

 

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