DaimlerChrysler settles class action case

Automotive Industries,  Sept, 2003  

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DaimlerChrysler has agreed to settle a consolidated class action case pending in the United States District Court for the District of Delaware relating to the 1998 Daimler-Benz/Chrysler merger that created DaimlerChrysler.

Former Chrysler investors have sued the carmaker, claiming the acquisition was billed as a merger of equals, rather than a takeover, in order to keep the price down. Subject to a definitive settlement agreement and to Court approval, DaimlerChrysler will pay the class action plaintiffs $300 million. The plaintiffs' initial claim was $22 billion.

DaimlerChrysler has applicable insurance policies aggregating approximately $220 million, to which extent it will seek reimbursement of the settlement payment. DaimlerChrysler believes that the class action is completely without merit, but the company has agreed to a settlement, since a local jury could have reached a different conclusion.

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