April 6, 2007
From the archives: Nov. 28, 2000
Kerkorian sues DaimlerChrysler for $9 billion; Busting up company is unlikely
Bill Vlasic and Mark Truby
DETROIT -- Can Kirk Kerkorian break up the biggest deal in auto history?
Not likely, say legal experts and analysts who reacted Monday to the billionaire investor's $9-billion lawsuit against DaimlerChrysler AG.
"The courts would be hesitant to separate the company," said Harvey Goldschmid, former general counsel of the U.S. Securities and Exchange Commission. "Even if the claims are valid, (Kerkorian) can be provided with monetary relief."
But the mega-lawsuit could prove thorny for DaimlerChrysler Chairman Juergen Schrempp, who recently admitted that the takeover of Chrysler Corp. in 1998 was falsely billed as a merger of equals.
"This lawsuit is something DaimlerChrysler will have to take seriously because of the rather unfortunate admission by Schrempp," said Adam Pritchard, a law professor at the University of Michigan.
Overturning the deal, however, may not be Kerkorian's goal.
Pritchard wondered whether Kerkorian may try to buy Chrysler, as he unsuccessfully attempted to do in 1995. Wall Street analysts speculated that the casino tycoon simply wants to recoup the cash he's lost on DaimlerChrysler's dismal stock.
"Kerkorian has lost a lot of money on this stock," said David Healy, an auto analyst with Burnham Securities. "He's at the point where he wants some of that money back."
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