Kerkorian Vs DaimlerChrysler Challenge Continues

WILMINGTON, Delaware January 21, 204; Peg Brickley (AP) -- Billionaire investor Kirk Kerkorian on Wednesday challenged the findings of a probe into an evidence fumble that halted the trial of his fraud lawsuit against DaimlerChrysler AG.

Papers filed with the federal court say there is still no explanation for the sudden appearance late in the trial of documents Kerkorian's attorneys say were important to his case.

Collins J. Seitz, the special master charged by the court with investigating the circumstances behind the late discovery of the documents, concluded the most likely explanation involved errors by two photocopying companies.

He found no evidence indicating German-U.S. auto giant DaimlerChrysler hid the documents.

U.S. District Judge Joseph Farnan is expected to make a final determination on the appropriate remedy for the late discovery of the notes.

Papers filed Wednesday in U.S. District Court in Wilmington say Kerkorian will seek sanctions against DaimlerChrysler for failure to hand over the evidence earlier.

The investor won't, however, ask Farnan to find intentional misconduct as a basis for the sanctions.

Farnan in December recessed the trial so Seitz could gather facts on the handling of the documents, handwritten notes of top executives at the former Chrysler Corp.

Not shown to Kerkorian's lawyers during two years of preparation for the trial, the notes turned up two days before the trial was scheduled to end.

Included in the late-revealed documents are notes that date back to the early days of merger negotiations between Chrysler and Daimler-Benz AG in 1998.

Kerkorian's suit says he was duped into backing the deal -- a takeover disguised as a merger of equals.