DaimlerChrysler has won the right to present allegations of insider trading in its defence against billionaire Kirk Kerkorian’s claims he was deceived in the 1998 merger of Daimler-Benz AG and Chrysler Corporation, a judge ruled, according to Bloomberg News.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The report said US District Judge Joseph Farnan in Wilmington,Delaware also said DaimlerChrysler may offer evidence that Kerkorian’s Tracinda Corp. leaked a story about the merger to the Wall Street Journal in 1998, and disclose information on Kerkorian’s wealth and investing activities.
“The judge obviously wants to hear all the evidence,” Robert Zito, a New York-based lawyer who defends companies from securities-fraud suits, told Bloomberg News.
Zito also told the news agency that the use of the insider trading evidence and other Kerkorian information, along with a November 6 ruling that Farnan, not a jury, will hear the case, boosts DaimlerChrysler’s chance of turning back the $US3 billion lawsuit. Bloomberg News noted that Chrysler in August agreed to a $300 million settlement with other shareholders for similar allegations that the merger was really a takeover.
According to Bloomberg News, DaimlerChrysler lawyers are using evidence that Kerkorian had inside information to convince the judge that he could not have been a victim of securities fraud while Kerkorian’s lawyers have said the 86-year-old billionaire did not obtain any information improperly.
“The fact that there is no jury trial is a huge victory — I can’t even tell you how big it is,” Zito, partner in the New York office of Chicago-based Schiff, Hardin & Waite, told the news agency. “You pluck six people off the subway, flash billions of dollars and a sense of wrong doing in front of them and they’re going to bang you. A judge is going to be more sophisticated,” he reportedly added.
James Aljian, while a Chrysler director and later a member of DaimlerChrysler’s shareholder committee, provided financial information and other non-public data to Kerkorian’s Tracinda from 1996 to 2000, he reportedly said in depositions cited by Bloomberg News. He worked at Tracinda managing investments, according to his testimony in the lawsuit, the report added.
