DETROIT Kerkorian, Daimler to face off in court

A former Chrysler shareholder seeks billions of dollars as a lawsuit filed in 2000 is heard.
DETROIT (AP) -- One side calls it a merger of equals, a trans-Atlantic union that created a global automotive giant. The other claims the deal was a veiled takeover, orchestrated to bilk shareholders out of billions in compensation.
A three-year battle between billionaire investor Kirk Kerkorian's Tracinda Corp. and German-American automaker DaimlerChrysler AG was scheduled to come to a head today in U.S. District Court in Wilmington, Del.
Barring a last-minute settlement or delay, the trial will feature testimony from the reclusive Kerkorian and top executives of DaimlerChrysler, including chairman Jurgen Schrempp.
Also set to testify is former Chrysler Corp. chairman Robert Eaton, a central figure in the deal's negotiations.
Lawsuit in 2000
Kerkorian sued DaimlerChrysler in 2000 after the London-based Financial Times quoted Schrempp as saying he never meant for the 1998 merger to be one of equals, and that the deal was billed that way "for psychological reasons."
Chrysler shareholders, including Kerkorian, claim they were duped into approving the so-called merger when in reality Daimler-Benz was acquiring Chrysler.
Kerkorian, whose Tracinda investment arm once held 14 percent of Chrysler's stock, says Schrempp -- then chairman of Daimler-Benz -- and other company officials misled shareholders to cheat them out of an acquisition fee that would have been due had Chrysler been purchased.
Some observers have estimated a judgment for Kerkorian could amount to $3 billion to $4 billion.
Gerald Meyers, former chairman of American Motors and now a faculty member at the University of Michigan, said Kerkorian has a chance to enrich himself further while also showing he's "dedicated to the proposition that shareholders should be treated better."
At the same time, Schrempp and DaimlerChrysler must try to show that Kerkorian's claims result from a misinterpretation among shareholders of a complicated business deal, Meyers said.
The other side
DaimlerChrysler has stated that Kerkorian not only approved of the acquisition but also pushed for its completion, and that a Tracinda executive sat on Chrysler's board during the process.
Key to the case, Meyers said, are Schrempp's comments to the Financial Times.
"Deep down I think he didn't mean to get caught, but he got caught," Meyers said. "He got caught saying something that either wasn't true or it was true and he shouldn't have said it."
Last week, U.S. District Judge Joseph J. Farnan Jr. rejected DaimlerChrysler's final attempts to have the case dismissed, saying evidence suggests the deal was a covert takeover from the outset.
Also this month, Farnan ruled that he, rather than a jury, will decide the case.
DaimlerChrysler attorney Michael Schell has said he considered the ruling for a bench trial a victory for the company because it upholds an agreement made between the two sides when the deal was finalized in 1998.
At the time, Schell said, Tracinda agreed that any legal disputes resulting from the merger would be heard by a judge. Tracinda had since asked for a jury trial.
Class-action suit
In August, DaimlerChrysler agreed to pay $300 million to settle a similar class-action lawsuit filed by other investors who also alleged they were misled about the deal.
At the time, the automaker said it believed the suit seeking $22 billion was groundless, but it agreed to the settlement "since a local jury could reach a different conclusion."