/ 2 January 2007

DaimlerChrysler reaches settlement with insurers

German-United States auto giant DaimlerChrysler said on Tuesday it had reached an out-of-court settlement with insurers over a legal squabble surrounding some comments by the group’s former chairperson regarding the merger of Daimler and Chrysler in 1998.

“There is a settlement,” a DaimlerChrysler spokesperson said, confirming a corresponding report in the Financial Times Deutschland but declining to reveal any details.

FT Deutschland said the insurers had agreed to pay DaimlerChrysler about €168-million ($222-million) in claims dating back to an interview given by the car maker’s then chairperson Juergen Schrempp in 2000.

In the interview, Schrempp described the 1998 tie-up between Daimler and Chrysler as a takeover of the US car maker by the German group, whereas the official line up until then had always been that it was a merger of equals.

Disgruntled Chrysler shareholders used Schrempp’s comments to file a suit against the German group, claiming they had been duped and demanding billions of euros in compensation.

DaimlerChrysler finally agreed to pay them €300-million and had assumed it was insured against such lawsuits.

But only one insurer, AIG, had so far paid, and DaimlerChrysler decided to sue the other insurers to recover the money. The car maker filed suit for €175-million in all. – AFP