DaimlerChrysler AG Accused of Defrauding Investors in Shareholder Class Action Brought by Berman DeValerio & Pease
30 November 2000
DaimlerChrysler AG Accused of Defrauding Investors in Shareholder Class Action Brought by Berman DeValerio & Pease
DETROIT, Nov. 30 Shareholders filed a federal class action
today charging DaimlerChrysler AG and others with securities
fraud, the law firm of Berman DeValerio & Pease LLP (http://www.bermanesq.com)
announced.
The lawsuit, which was filed in the United States District Court for the
Eastern District of Michigan, contends that a massive fraud surrounded the
largest automotive industry transaction in history, the 1998 merger of
Daimler-Benz AG and Chrysler Corporation.
DaimlerChrysler is a manufacturer of motor vehicles headquartered in
Stuttgart, Germany, and Auburn Hills, Michigan. Berman DeValerio & Pease,
which is based in Boston, has represented defrauded investors in class actions
for nearly two decades.
The complaint seeks to recover damages on behalf of three classes of
investors damaged by the alleged fraud: those who bought DaimlerChrysler stock
between November 14, 1998 and October 29, 2000; those who received
DaimlerChrysler stock in exchange for Chrysler shares as a result of the
merger; and those who owned Chrysler stock as of July 20, 1998, the date of
the merger vote.
The complaint accuses Jurgen Schrempp, the longtime head of Daimler-Benz
who is now chairman of DaimlerChrysler, of masterminding a plan to mislead
shareholders into approving the merger.
According to the complaint, the defendants repeatedly misrepresented the
deal to the investing public as a "merger of equals," with Chrysler's
management running U.S. operations, when the plan all along was to convert
Chrysler into a division subordinate to German managers under Schrempp's
control.
"Daimler-Benz's assurances formed the foundation for the shareholders'
decision to vote in favor of the business combination," the complaint says.
"Had shareholders known the truth, they never would have voted for the
merger."
Among the documents cited to support the allegations is an October 2000
Financial Times interview in which Schrempp said he lied to Chrysler
management to gain approval for the transaction. "If I had gone and said
Chrysler would be a division, everybody on their side would have said:
'There's no way we'll do a deal,'" he said. "But it's precisely what I wanted
to do."
By the end of November 2000, Schrempp had ousted almost all former
Chrysler executives in top posts -- including two "co-chairmen" representing
the U.S. division. News about the blatant deception and U.S. management unrest
has caused the price of DaimlerChrysler stock to plunge some 18%.
If you purchased DaimlerChrysler common stock from November 14, 1998 to
October 29, 2000, received DaimlerChrysler stock in exchange for Chrysler
stock as a result of the merger, or owned Chrysler stock as of July 20, 1998,
you may wish to contact the following attorneys at Berman DeValerio & Pease to
discuss your rights and interests:
N. Nancy Ghabai, Esq.
Michael G. Lange, Esq.
Berman DeValerio & Pease
One Liberty Square, Boston, MA 02109
bdplaw@bermanesq.com
(800) 516-9926
You may also visit us at our website at http://www.bermanesq.com.
If you wish to apply to be lead plaintiff in this action, a motion must be
filed on your behalf with the court no later than January 29, 2001. To be a
member of the class you need not take any action at this time and you may
retain counsel of your own choice. To serve as lead plaintiff, however, you
must meet certain legal requirements. You may contact the attorneys at Berman
DeValerio & Pease to discuss your rights regarding the appointment of lead
plaintiff and your interest in the class action.
With offices in Boston and San Francisco, Berman DeValerio & Pease LLP has
prosecuted shareholder class actions since 1982, recovering more than $1
billion for investors. The firm has acted as lead counsel in numerous lawsuits
in which its clients accused companies of violating federal securities laws.
It has successfully litigated these actions, and has been singled out for its
excellence by many courts. The firm prides itself on its responsiveness to
shareholders and their needs in each case.