DaimlerChrysler AG and Daimler-Benz AG : Chrysler Corporation Summary: According to the latest docket, on April 7, 2005, the Court entered the Judgment in favor of Defendants and against Plaintiff Tracinda Corporation, and the case was closed. The Plaintiff Tracinda Corporation filed a Notice of Appeal and the defendants responded by filing a Notice of Cross Appeal. The appeal is currently pending in the Third Circuit Court of Appeals.
As reported by the Company’s FORM 20-F For The Fiscal Year Ended December 31, 2003, in August 2003, DaimlerChrysler agreed to settle the consolidated class action case for $300 million (approximately [EURO]240 million adjusted for currency effects), and shortly thereafter, DaimlerChrysler concluded a settlement with Glickenhaus, one of the two individual plaintiffs. On February 5, 2004, the Court issued a final order approving the settlement of the consolidated class action case and ordering its dismissal. The settlements did not affect the case brought by Tracinda, which claims to have suffered damages in the range of $856 million to $1.28 billion. In November 2003, the Court denied the remaining aspects of defendants' motion for summary judgment. The Tracinda case went to trial in December 2003 and continued for approximately two weeks. Trial of the case was suspended with approximately two days of trial time remaining while the parties addressed a discovery issue in a separate hearing. The trial reconvened on February 9, 2004, and was completed February 11, 2004.
As summarized by the same SEC filing, in the fourth quarter of 2000, Tracinda Corporation filed a lawsuit in the United States District Court for the District of Delaware against DaimlerChrysler AG and some of the members of its Supervisory Board and Board of Management (Messrs. Kopper, Prof. Schrempp and Dr. Gentz). Shortly thereafter, other plaintiffs filed a number of actions against the same defendants, making claims similar to those in the Tracinda complaint. Two individual lawsuits and one consolidated class action lawsuit were originally pending. The plaintiffs, current or former DaimlerChrysler shareholders, alleged that the defendants violated U.S. securities law and committed fraud in obtaining approval from Chrysler stockholders of the business combination between Chrysler and Daimler-Benz in 1998. The consolidated class action complaint contained additional allegations that were later dismissed. In March 2003, the Court granted Mr. Kopper's motion to dismiss each of the complaints against him on the ground that the Court lacked jurisdiction over him. In February 2003, the DaimlerChrysler defendants filed motions seeking summary judgment on all claims in the cases on several grounds, including that the claims are barred by the statute of limitations. In June 2003, the Court denied defendants' motion relating to the statute of limitations.
The original complaint charges that defendants violated Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14a-9 promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, for materially false representations of fact contained in statements to the public, and documents filed with the SEC, in connection with DaimlerChrysler's procurement of the necessary shareholder approval for the Merger. Specifically, as alleged in the complaint, defendants issued numerous statements assuring the markets that the Merger would be a Merger of Equals, when in fact, defendants had intended to turn Chrysler into a division of DaimlerChrysler. Since the Merger, DaimlerChrysler has replaced numerous high-ranking executives of Chrysler with those of DaimlerChrysler. The shareholders who exchanged their Chrysler shares for those of DaimlerChrysler have seen the stock price of DaimlerChrysler drop dramatically since the Merger.
SIC Code: 3711
Sector: Consumer Cyclical
Industry: Auto & Truck Manufacturers
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