DaimlerChrysler AG - Securities Class Action

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Copyright (c) 2001
Stanford Law School

DaimlerChrysler AG Summary: According to the latest docket posted, on February 17, 2006, the plaintiffs filed a notice of appeal of the January 24, 2006 Order which granted the defendants’ motion to dismiss the complaint. The appeal is pending in 3rd Circuit Court of Appeals.

In a press release dated February 28, 2006, the U.S. District Court for the District of Delaware dismissed a securities fraud class action brought by a class of foreign investors against a foreign company based on the foreign company's merger with a U.S. company. The putative class consists of shareholders who are not citizens or residents of the U.S. who purchased securities of DaimlerChrysler AG, a German corporation, including former shareholders of the Chrysler Corp., who surrendered their Chrysler shares in connection with the merger of Chrysler and Daimler-Benz. The class alleged that the merger was falsely identified as a "merger-of-equals" but was actually an acquisition of Chrysler by Daimler-Benz. The class alleged that, after the alleged acquisition, Daimler-Benz managers replaced all Chrysler employees, and the shareholders did not receive control premium payments as warranted by an acquisition. The class sued pursuant to §14(a) of the Securities Exchange Act of 1934, § 12(a)(2) of the Securities Act of 1933, and § § 10(b) and 20(a) of the Securities Exchange Act (see 2 S.Cl.Act.Rep. 10-2, June 15, 2004). Daimler-Benz moved the district court to dismiss the case for lack of jurisdiction over foreign entities. Securities laws silent as to extraterritorial application of law. Generally, courts avoid exercising extraterritorial application of law in order to protect clashes between U.S. laws and laws of other nations. …The district court dismissed the claims of the putative class, finding that because the class is not comprised of Americans, the outcome of the case will not affect U.S. investors or markets, and the alleged fraud was perpetuated by a German company in Germany, the district court lacked jurisdiction.

The complaint charges that Defendants misrepresented the nature of the 1998 merger between Daimler-Benz AG and the Chrysler Corporation. According to plaintiffs, defendants framed the transaction as a 'merger of equals', rather than an acquisition, in order to avoid paying an 'acquisition premium'. Plaintiffs' Complaint alleges that Defendants made this representation to Chrysler shareholders in the Registration Statement, Prospectus, and Proxy, leading 97% of Chrysler shareholders to approve the merger. The Complaint further alleges that the Defendants made various misrepresentations after the merger to further their scheme.

NOTE: In 2000, a separate securities class action lawsuit was filed on behalf of foreign and domestic investors against DaimlerChrysler (the '2000 lawsuit') pertaining to the same allegations at issue in this action filed on May 24, 2004. DaimlerChrysler AG recently settled the 2000 lawsuit for $300 million. Foreign investors were excluded from the class settlement, and therefore will not receive any of the $300 million recovered. The May 24 action is on the behalf of these foreign investors.

INDUSTRY CLASSIFICATION:
SIC Code: 3711
Sector: Consumer Cyclical
Industry: Auto & Truck Manufacturers

COMPANY/ISSUER NAME:	DaimlerChrysler AG, Inc.
COMPANY/ISSUER TICKER:	DCX
COMPANY WEBSITE:	http://www.daimlerchrysler.com/dccom

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Blechner, et al. v. Daimler Chrysler, Inc., et al.

COURT: D. Delaware	DOCKET NUMBER: 04-CV-331
JUDGE NAME: Hon. Joseph J. Farnan Jr.
DATE FILED: 05/24/2004	SOURCE: Business Wires
CLASS PERIOD START: 11/17/1998	CLASS PERIOD END: 11/17/2000
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Milberg Weiss Bershad & Schulman LLP (Delaware) 919 N. Market Street, Suite 411, Wilmington, DE, 19801 (voice) 302.984.0597, (fax) 302.984.0870, info@milbergweiss.com Milberg Weiss Bershad & Schulman LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 212.594.5300, (fax) 212.868.1229, info@milbergweiss.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Seeger Weiss LLP (New York Old Address) 40 Wall Street. The Trump Building, New York, NY, 10005 (voice) 212.584.0700, (fax) , info@seegerweiss.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 4

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 05/24/2004
Plaintiffs' Brief In Opposition To The Motion Of DaimlerChrysler AG And Daimler-Benz AG To Dismiss The Complaint
Type: Brief		Date on the document: 05/02/2005
Order
Type: Order		Date on the document: 01/24/2006
Notice of Appeal
Type: Notice		Date on the document: 02/17/2006
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/19/2006

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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