Insurers, DaimlerChrysler Settle Dispute
DaimlerChrysler and a group of insurers have agreed to settle a dispute over recovering the costs of a U.S. class-action lawsuit in 2003, the German car maker and insurers said.
Spokesmen for DaimlerChrysler and U.S. insurer ACE, which led a consortium of insurers, said that an agreement had been reached, but declined to give details.
The head of ACE's German operations, Lothar Riedle, told Reuters he hoped the settlement would spark a discussion in Germany about whether Director's & Officer's liability insurance coverage was too broad.
The Financial Times Deutschland reported on Tuesday that a group of insurance companies led by ACE had agreed shortly before the end of the year to pay DaimlerChrysler $221.5 million (168 million euros) to settle the dispute.
The paper did not cite sources for the story.
DaimlerChrysler agreed in August 2003 to pay some U.S. shareholders around 275 million euros to settle allegations that the 1998 deal to form the world's fifth-biggest carmaker was a takeover of Chrysler by Daimler-Benz, not a merger of equals as the company had said.
At the time, DaimlerChrysler said insurance would cover up to 200 million euros of the cost.
The Financial Times Deutschland said the group of insurers led by ACE in the talks included France's AXA, Germany's GerlingandHDI, Chubb, XL Capital, Zurich Financial and Basler.
Axa and Zurich Financial confirmed that they were part of the insurance consortium deal but declined further comment, Gerling and HDI declined comment, while Basler, Chubb, and XL were not immediately available for comment.
The paper said that insurer AIG had already agreed to pay 25 million euros to Daimler and that the late December agreement with ACE meant that Daimler had recovered most of the money it had sought.