Late Evidence Delays Daimler Trial
A federal judge ordered a recess Tuesday in billionaire Kirk Kerkorian’s suit against DaimlerChrysler after the automaker’s lawyers turned over documents at the last minute that could be favorable to Kerkorian.
Judge Joseph Farnan Jr. ordered the recess while a special master for the court holds a hearing to determine “how we got in this mess.” It’s unclear when the special master will hold the hearing or how long it will take.
Kerkorian is suing DaimlerChrysler, claiming that Daimler-Benz falsely characterized a 1998 takeover of Chrysler Corp.
Kerkorian, whose Tracinda Corp. was the largest Chrysler shareholder at the time, is suing for more than $1 billion in compensatory damages. He claims that by purposely mischaracterizing the deal, Daimler-Benz avoided paying him an acquisition fee of up to 62% on his shares when the companies merged.
DaimlerChrysler maintains that Kerkorian supported the deal and grew disgruntled only when his shares lost value.
As the court opened Tuesday morning, Kerkorian attorney Terry Christensen told Farnan that just before midnight Monday the billionaire’s legal team had received 61 pages of handwritten notes from a former Chrysler executive. The notes refer to negotiations between Daimler-Benz and Chrysler.
Saying DaimlerChrysler had more than two years to turn over the documents, Christensen asked the court for a judgment in Kerkorian’s favor.
Christensen said the notes turned over by former Chrysler Chief Financial Officer Gary Valade -- who now is purchasing manager for DaimlerChrysler and was scheduled to testify in the case Tuesday -- contradict testimony from Chrysler witnesses who have testified in the trial.
Christensen highlighted passages in the notes that included phrases such as “sell out for profit,” “why didn’t we buy?” and “senior management sold out” that appear to support Kerkorian’s case, although it was unclear who wrote those passages.
Farnan said he had to review the documents and was concerned about language that suggested the deal was a takeover.
“It is important to know how documents with that kind of a note in it didn’t get turned over,” Farnan said.
Chrysler attorney Tom Allingham replied, “No comment,” when asked by a reporter why the documents were turned over at the last minute.
