Mercedes 2001 Annual Report Download - page 71

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Analysis of the Financial Situation 67
Legal risks. Like all internationally active automobile
manufacturers, the DaimlerChrysler Group is affected
by intensifying legal regulations in its various markets
concerning the exhaust emissions and fuel consumption
of its range of cars as well as their safety standards.
Furthermore, there are several actions, in particular
relating to product liability, pending against companies
of the DaimlerChrysler Group. In the event of adverse
decisions in these proceedings, DaimlerChrysler could
be required to pay substantial compensatory and
punitive damages, or to undertake service actions,
recall campaigns or other costly actions.
A number of shareholder lawsuits are pending
in the United States against DaimlerChrysler and
certain members of its Supervisory Board and Board
of Management that allege the defendants violated
U.S. securities law and committed fraud in obtaining
approval from Chrysler stockholders for the business
combination between Chrysler and Daimler-Benz AG
in 1998. The complaints seek relief ranging from sub-
stantial monetary damages to rescinding the business
combination. DaimlerChrysler believes that these
claims are without merit and is defending against them
vigorously.
Overall risk. No risks are apparent that could jeopardize
the continued existence of the Group.
Events after the end of the 2001 financial year. Follow-
ing a decision of DaimlerChrysler’s Board of Manage-
ment in 2001, DaimlerChrysler and GE Capital reached
an agreement in January 2002 for GE Capital to
purchase a portion of the DaimlerChrysler’s Capital
Services portfolio in the United States. DaimlerChrysler
will receive approximately €1.3 billion for the sale,
which represents a further step towards focusing on
the automotive business. The transaction is expected to
be completed in the first quarter of 2002.
In January 2002, DaimlerChrysler decided to exit
the debis Systemhaus joint venture in March 2002 by
exercising its option to sell to Deutsche Telekom the
Group’s 49.9% interest in T-Systems ITS (formerly
debis Systemhaus) for proceeds of €4.7 billion.
No further developments beyond the ones
described above have occurred since the end of the
2001 financial year which are of major significance to
DaimlerChrysler and would lead to a changed assess-
ment of the Group’s position. The course of business
in the first two months of 2002 confirms the statements
made in the section Outlook.