Mercedes 2013 Annual Report Download - page 235

239
F | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
In mid-January 2011, the European Commission carried out anti-
trust investigations of European commercial vehicle manu-
facturers, including Daimler AG. Daimler is taking the Commis-
sion’s initial suspicion very seriously and is also – parallel to
the Commission’s investigations – carrying out its own extensive
internal investigation to clarify the underlying circumstances.
If antitrust infringements are discovered, the European Commis-
sion can impose considerable fines depending on the gravity
of the infringement. In accordance with IAS 37.92, the Group does
not provide further information on this antitrust investigation
and the associated risk for the Group, especially with regard
to the measures taken in this context, in order not to impair
the outcome of the proceeding.
On April 1, 2010, Daimler announced a settlement of the
previously initiated US Securities and Exchange Commission
(SEC) and US Department of Justice (DOJ) investigations
into possible violations by Daimler of the anti-bribery, record-
keeping, and internal-controls provisions of the US Foreign
Corrupt Practices Act (FCPA).
As a result of such settlement, Daimler paid a total of US$185
million in fines and civil disgorgement and agreed to engage
the Honorable Louis J. Freeh as post-settlement monitor
for a three-year period. Communications with and provision
of documents to the offices of German public prosecutors
regarding the matters that have been under investigation by
the DOJ and SEC have taken place.
On December 31, 2012 the deferred prosecution agreements
expired. The Honorable Louis J. Freeh completed his role as post-
settlement monitor as planned on April 1, 2013. All criminal
charges pending against Daimler in US courts have been dis-
missed officially afterwards.
On August 17, 2009, the Official Committee of Unsecured
Creditors of OldCarCo LLC (formerly Chrysler LLC) filed a lawsuit
with the United States Bankruptcy Court, Southern District
of New York, against Daimler AG, Daimler North America Corpo-
ration and others. The Committee has been substituted by
the Liquidation Trust, which claims unspecified damages based
on theories of constructive fraudulent transfer and other legal
theories, alleging that the consideration received in certain trans-
actions effected in connection with the investment by Cerberus
in Chrysler LLC was not fair consideration. Daimler has success-
fully submitted miscellaneous legal defense arguments, so
that the Bankruptcy Court dismissed all claims with prejudice
as of May 12, 2011. The appeal of the Liquidation Trust led to
a confirmation of the Bankruptcy Court’s decision by the United
States District Court of the Southern District of New York.
A second appeal by the Liquidation Trust to the United States
Court of Appeals for the Second Circuit, New York as of
December 19, 2011 was unsuccessful. On January 30, 2013,
the US Court of Appeals unanimously affirmed the judgment
of the Bankruptcy Court. The decision is now final.
The Federal Republic of Germany initiated arbitration proceed-
ings against Daimler Financial Services AG, Deutsche Telekom AG
and Toll Collect GbR and submitted its statement of claims
in August 2005. It seeks damages, contractual penalties and the
transfer of intellectual property rights to Toll Collect GmbH.
In particular, the Federal Republic of Germany is claiming
– lost revenue of €3.33 billion for the period September 1,
2003 through December 31, 2004 plus interest at 5%
per annum over the respective base rate since submission
of claims (amount as of November 21, 2010 at €1.4 billion),
– and contractual penalties of approximately €1.65 billion
through July 31, 2005 plus interest at 5% per annum
over the respective base rate since submission of claims
(amount as of November 21, 2010 at €282 million),
– plus refinancing costs of €115 million.
Since, among other things, some of the contractual penalties
are dependent on time and further claims for contractual pen-
alties have been asserted by the Federal Republic of Germany,
the amount claimed as contractual penalties may increase.
Defendants submitted their response to the statement of claims
on June 30, 2006. The Federal Republic of Germany delivered
its reply to the arbitrators on February 15, 2007, and the defen-
dants delivered their rebuttal on October 1, 2007 (see also
Note 30). The arbitrators held the first hearing on June 16 and
17, 2008. Additional briefs from the claimant and the defen-
dants were filed since then. A hearing of witnesses and experts
took place between December 6 and 14, 2010. The parties
submitted further written statements on July 15 and November
15, 2011. After the Tribunal’s President resigned for personal
reasons as of March 30, 2012, the new President was determined
by the Administrative Court in Berlin as of October 29, 2012.
Daimler believes the claims of the Federal Republic of Germany
are without merit and will continue to defend itself vigorously.
The Group establishes provisions in connection with pending
or threatened proceedings to the extent a loss is probable
and can be reasonably estimated. Such provisions are reflected
in the Group’s consolidated financial statements and are
based on estimates. Risks resulting from legal proceedings,
however, sometimes cannot be assessed reliably or only
to a limited extent. Consequently, provisions accrued for some
legal proceedings may turn out to be insufficient once such
proceedings have ended. Daimler may also become liable for
payments in legal proceedings no provisions were established
for. Although the final resolution of any such proceedings could
have a material effect on Daimler’s operating results and
cash flows for a particular reporting period, Daimler believes
that it should not materially affect the Group’s financial position.