Wearing a grey suit, a blue tie and white shirt, the 86-year-old former boxer, aircraft pilot and casino entrepreneur appeared in federal court in Delaware to testify in the civil case against DaimlerChrysler and members of its top management, from whom Tracinda, his investment vehicle, is seeking at least $1.2bn in damages.
Mr Kerkorian contends that Daimler-Benz duped him by failing to disclose its intention to take over Chrysler and relegate it to a division, therefore depriving the Michigan-based group’s shareholders of the “control premium” they might have expected.
He showed the court a poster detailing how the composition of DaimlerChrysler’s management board had shifted from November 1998, when its was split equally between Daimler-Benz and Chrysler members, and January 2004, when 10 board members are expected to be from the German side and only one from the American side.
“I think everybody understood that Chrysler was not for sale and it was not being sold . . . it was a merger of equals,” he insisted.
However, he admitted to only “browsing” through the merger agreement, relying instead on his close relationship with Robert Eaton, the former chairman of Chrysler who negotiated the deal with Daimler-Benz.
Tuesday was the second day of a trial that is expected to last into the middle of the month and feature appearances and testimonies by Mr Eaton, as well as Jürgen Schrempp, chairman of DaimlerChrysler, and his fellow defendant Manfred Gentz, Daimler Chrysler’s chief financial officer. The personalities involved, as well as the substantive matter, which goes to the heart of how mergers and acquisitions are negotiated, have focused much attention on the Wilmington courtroom.
After being questioned by Terry Christensen, his longtime lawyer from the firm Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, Mr Kerkorian faced an initial period of cross-examination in which DaimlerChrysler’s lawyers dwelled on his dealings with Chrysler in the early 1990s, when he had frequent squabbles with the Chrysler management, including Mr Eaton.
In exchanges at times laced with tension and irony, DaimlerChrysler’s lead litigant, Jonathan Lerner of Skadden, Arps, Slate, Meagher & Flom, suggested Mr Kerkorian’s interest in Chrysler had been opportunistic in many instances, citing his aggressive push for share buy-backs in the early to mid-1990s and his actual bid for the company, which was rejected.