BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Monday, 27 November, 2000, 22:15 GMT
DaimlerChrysler sued for $9bn
DaimlerChrysler boss Jürgen Schrempp at the presentation of his firm's results
DaimlerChrysler boss Jürgen Schrempp under fire
DaimlerChrysler's third largest shareholder is suing the company for $9bn.

Billionaire investor Kirk Kerkorian's Tracinda Corporation is also calling for the unwinding of the $36bn merger in 1998 of Daimler Benz and Chrysler.

Tracinda has filed a lawsuit in the US District Court in Delaware against the firm and senior DaimlerChrysler executives, including chairman and chief executive Jürgen Schrempp.

It alleges that the merger was misrepresented as a marriage of equals.

DaimlerChrysler
Mercedes
Chrysler
Plymouth
Dodge
Jeep

Tracinda calls for Chrysler to "once again be an independent corporation owned by Chrysler shareholders".

Tracinda's lawyers accused the two companies of "fraudulently inducing the 1998 vote of Chrysler shareholders and knowingly deceiving the Securities and Exchange Commission, Chrysler's board of directors, Tracinda and other Chrysler shareholders through false representations".

Tracinda, Chrysler's largest shareholder in 1998, said it would not have voted for the merger "had it known Daimler Benz's true intention was to acquire and subjugate Chrysler, reduce it to division status and fire Chrysler's management".

The value of Tracinda's stake in the car firm has more than halved since the merger.

"This massive decline in shareholder value has coincided with Mr Schrempp's subjugation of Chrysler into a subordinate role and his purge of Chrysler's own long-time executives, which has demoralised Chrysler employees and dealers throughout North America."

The Chrysler operations are now losing money, plants are being idled, union relations are strained, and white-collar layoffs are expected soon.

Tracinda held 13.75% of Chrysler at the time of the merger agreement and now holds 4% of DaimlerChrysler.

Shares in DaimlerChrysler fell just under 2% when trading started in Germany on Tuesday morning.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

03 Jun 00 | Business
Automotive Empires
12 May 00 | Business
Analysis: Europe's car industry
18 Sep 98 | The Company File
Shareholders back Chrysler-Daimler merger
26 Jul 00 | Business
Chrysler drags down Daimler
28 Nov 00 | Business
Gambler takes on DaimlerChrysler
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories