Daimler's Schrempp To Testify In Kerkorian Suit

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Auburn Hills December 1, 2003; The WSJ reported that barring a last-minute deal, billionaire investor Kirk Kerkorian and DaimlerChrysler AG Chairman Jurgen Schrempp will testify against each other in a federal court in Delaware in a case that pits the casino mogul who once sought control of Chrysler Corp. against the German who ultimately managed to win it, Monday's Wall Street Journal reported.

Mr. Schrempp is expected next week to face questioning on whether he fraudulently represented the 1998 combination of Daimler-Benz and Chrysler Corp. as a partnership of equals when he intended a German takeover all along. Mr. Kerkorian, who through his Tracinda Corp. was Chrysler's largest single shareholder, is scheduled to testify this week.

Mr. Kerkorian is accusing Mr. Schrempp of lying to investors, allowing Daimler-Benz to buy Chrysler shares without paying a premium "amounting to billions of dollars" which would have been paid had the transaction been described as a takeover.

U.S. District Judge Joseph Farnan has also ordered live testimony from Manfred Gentz, DaimlerChrysler's chief financial officer, as well as Robert Eaton, Chrysler's former chairman. James Holden, who was dismissed as Chrysler's president in 2001, also is expected to be called to testify. The case is expected to last until Dec. 17, with each side being given 30 hours to present its case, according to a person familiar with the schedule. The judge has said he will decide the case, not a jury.

Mr. Kerkorian is seeking at least $2 billion. In August, DaimlerChrysler agreed to pay $300 million to settle a class-action suit filed by a group of institutional investors. Like Mr. Kerkorian, they also accused the company of lowering the price paid for Chrysler shares by misrepresenting the nature of the deal.

Representatives of Mr. Kerkorian and DaimlerChrysler wouldn't comment on whether any settlement talks were going on. Mike Schell, an attorney for DaimlerChrysler, said the case didn't have merit.