DaimlerChrysler: Kerkorian company destroyed evidence

John Porretto

Wednesday, March 19, 2003 | 9:46 a.m.

DETROIT -- DaimlerChrysler says billionaire Kirk Kerkorian's personal assistant destroyed crucial evidence in his multibillion-dollar lawsuit against the German-American automaker, according to a new filing in the suit over the 1998 Daimler-Benz/Chrysler merger.

The automaker is asking a federal judge to dismiss three of the suit's eight claims -- those that deal specifically with the destroyed documents.

Las Vegas casino resort owner Kerkorian, whose Tracinda Corp. once held 14 percent of Chrysler's stock, claims shareholders were duped into approving the deal that combined Chrysler and Daimler-Benz when executives from both companies portrayed it as a merger of equals.

His suit claims Daimler-Benz chairman Juergen Schrempp -- now DaimlerChrysler's boss -- and other company officials misled shareholders to cheat them out of their rightful acquisition fee. Kerkorian says Tracinda would not have voted for the union had he known it was really a takeover.

DaimlerChrysler has stated Kerkorian not only approved of the acquisition but pushed for its completion, and that a Tracinda executive sat on Chrysler's board during the process.

In a brief released Tuesday, DaimlerChrysler says Jackie Thode, Kerkorian's longtime assistant, destroyed evidence of meetings and conversations between Kerkorian and then Chrysler chief executive Robert Eaton.

Tracinda contends Eaton periodically updated Kerkorian on negotiations and represented to him the deal would be a merger of equals.

DaimlerChrysler says evidence of the dialogue is central to Tracinda's case, yet Thode has admitted under oath she "threw out" the underlying documents five days before the suit was filed.

"It's unfathomable that in a time of heightened awareness about document preservation Tracinda would destroy key evidence just as this litigation began," DaimlerChrysler said in a statement.

Terry Christensen, an attorney for Tracinda, said the company committed no wrongdoing.

"After DaimlerChrysler admitted to the world in 2000 that it knowingly deceived Chrysler shareholders, it now tries to divert attention from its unlawful conduct by filing baseless motions. And, in dealing with the media, DaimlerChrysler is weaving a fictitious story and telling bald-faced lies," Christensen said in a statement.

Both sides have made various claims in recent days as filings once covered by court-ordered confidentiality rules have been made public.

Late last month, lawyers for Kerkorian won access to a tape recording they believe proves DaimlerChrysler misled shareholders. The recording involves an October 2000 interview the Financial Times newspaper conducted with Schrempp.

Tracinda's lawyers say Schrempp admitted in the recording the deal was never destined to be a merger of equals. DaimlerChrysler denies the recording contains any such admission.

DaimlerChrysler has repeatedly said the suit, filed in Delaware and tentatively headed for a May trial, is baseless.