Judge Gives Nod to DaimlerChrysler Settlement

October 6, 2003 (PLANSPONSOR.com) - DiamlerChrysler's proposed $300-million settlement in a shareholder class-action suit has been given preliminary approval.

The lawsuit was filed by investors, including pension funds, over the company’s 1998 Chrysler takeover.   At the time, plaintiffs contended the deal was billed as a merger of equals, rather than a takeover, in order to keep the price down.   However, DaimlerChrysler Chief Executive Juergen Schrempp told the Financial Times that he had always meant to relegate Chrysler to a division of the group, leading to the lawsuit, according to news sources.

Plaintiff lawyer Jay Eisenhofer – whose firm, Grant & Eisenhofer is involved in a number of other investor lawsuits including Siebel Systems (See  Siebel Systems Could Face Punitive Damages For Option Fiasco ) and HealthSouth (See  Louisiana Retirement System Sticks HealthSouth With Lawsuit ) – said among his clients was a group of large public pension funds, including the Florida state employee pension fund, as well as the municipal pension funds of Denver and Chicago.

US District Judge Joseph Farnan of the US District Court of Delawaredetermined earlier that the class consists of everyone, except foreign investors, who exchanged their shares of Chrysler Corp for shares of DaimlerChrysler in the November 1998 merger or bought shares of DaimlerChrysler on the open market from the time of the merger through November 17, 2000.