By Jon Hurdle
PHILADELPHIA, Jan 27 (Reuters) - Bowing to a demand from billionaire investor Kirk Kerkorian, DaimlerChrysler AG said on Tuesday its chief executive was willing to provide further testimony about the 1998 merger that formed the company, which Kerkorian has denounced as a fraud.
The offer came in a letter to Judge Joseph Farnan of U.S. District Court in Wilmington, Delaware, where lawyers for Kerkorian filed a motion on Friday insisting that DaimlerChrysler CEO Juergen Schrempp be made available for further questioning about the Daimler-Benz AG-Chrysler Corp. link-up.
"Without conceding that it is necessary or appropriate, defendants are willing to recall Mr. Schrempp at trial," DaimlerChrysler said in its letter to Farnan.
The letter, a copy of which was obtained by Reuters, was dated Jan. 27 and signed by Tom Allingham, one of the lead attorneys defending DaimlerChrysler in the trial of Kerkorian's high-profile fraud lawsuit.
Schrempp, mastermind of the $36 billion deal that created the world's fifth-largest automaker, defended what he has long billed as a "merger of equals" during three days of testimony in Farnan's courtroom last month.
But attorneys for Kerkorian's Tracinda investment firm submitted their demand for further testimony from the German auto boss on grounds that critical new evidence had been produced by the defense after Schrempp took the stand.
They were referring to documents -- mostly hand-written notes by former Chrysler Chief Financial Officer Gary Valade -- that forced a sudden suspension of the trial in mid-December, when DaimlerChrysler said they had been overlooked and never shown to Kerkorian's attorneys.
Valade was a senior figure in the merger negotiations and Tracinda claims that his notes put the testimony of all previous witnesses in the fraud trial in a different light.
In Tuesday's letter, in answer to another request from Tracinda, DaimlerChrysler said it was also willing to try to get former Chrysler President Thomas Stallkamp recalled to testify in the fraud trial.
It stressed, however, that if Schrempp and Stallkamp were to take the stand again, it would be "solely for the purpose of answering questions directly relating to Mr. Valade's notes."
CONFERENCE DELAYED
Farnan had scheduled a teleconference with opposing sides in the lawsuit for 2 p.m. EST (1900 GMT) on Tuesday, but a court clerk said it had been delayed until Friday afternoon. No reason was given, but DaimlerChrysler has been pushing for a speedy end to the trial, which has been adjourned since December.
DaimlerChrylser noted in its letter that Schrempp would be unavailable to travel to the United States and testify the week of Feb. 16. The automaker will give investors a detailed breakdown of its 2003 financial results and outlook for 2004 at an annual news conference in Stuttgart on Feb. 19.
Kerkorian, a reclusive Las Vegas casino mogul who owned nearly 14 percent of Chrysler's shares before the Daimler-Chrysler tie-up, claims Schrempp and other executives pitched the 1998 deal as a merger rather than a takeover to lower the transaction price and avoid paying Chrysler shareholders a "control premium" for their shares. He is seeking more than $1 billion in damages.