Court Rules Against Kerkorian in Daimler Chrysler Merger Of Equals Lawsuit

Court Official Rules DaimlerChrysler Didn't Intentionally Withhold Notes From Kirk Kerkorian

WASHINGTON January 12, 2003; Dee-Ann Durbin writing for the AP reported that DaimlerChrysler AG did not intentionally withhold nearly 70 pages of notes and other documents from investor Kirk Kerkorian in his lawsuit against the automaker, a court official ruled in a decision released Monday.

U.S. District Court Judge Joseph Farnan Jr. halted Kerkorian's trial on Dec. 16 after DaimlerChrysler suddenly gave Kerkorian's attorneys 61 pages of handwritten notes and other documents from former Chrysler chief financial officer Gary Valade. DaimlerChrysler later submitted six more pages of documents from Valade's files.

Farnan asked special master Collins Seitz Jr. to determine why the documents were presented so late and whether Kerkorian's case was prejudiced as a result. Seitz said Monday that the withholding of files was an accident, and DaimlerChrysler didn't act in bad faith.

"I find that the most likely explanation for the late production of documents is careless copying of Mr. Valade's documents by outside copy vendors, discovered by Mr. Valade and the attorneys just before Mr. Valade's testimony," Seitz wrote.

Farnan will use Seitz's decision to determine the future of the Delaware-based trial, which was almost completed when it was put on hold. It was not immediately clear Monday when Farnan would make his decision or whether the trial will resume.

There was no immediate comment Monday from Kerkorian's attorneys, who had asked Farnan for a default judgment in Kerkorian's favor. DaimlerChrysler said it was pleased with Seitz's decision.

"It was clear from the outset that it was just an error. This just confirms it," spokesman Han Tjan said.

Kerkorian is suing the automaker for more than $1 billion, saying Daimler-Benz falsely characterized a 1998 takeover of Chrysler as a merger.

Kerkorian's Tracinda Corp. was the largest Chrysler shareholder at the time of the merger. The billionaire investor claims Daimler-Benz avoided paying him an acquisition fee of up to 62 percent on his shares when the companies merged.

DaimlerChrysler maintains that Kerkorian supported the deal and grew disgruntled only when his shares lost value.