Somehow we don’t expect this story to elicit many boo-hoos (unless they’re sarcastic, mocking boo-hoos), but Cerberus is complaining that it was misled when acquiring Chrysler from Daimler:
AP: Relations between Chrysler’s current and former owners turned ugly Wednesday when private equity firm Cerberus Capital Management LP accused Daimler AG of “intentionally and materially” misleading Cerberus before the German automaker sold Chrysler last year. Cerberus alleged that Daimler breached its obligations in the sale contract, including misrepresenting changes in underwriting practices for vehicle financing and leases.
Both sides are negotiating a settlement, but Cerberus said in a statement that Daimler has “refused to recognise the gravity of the claims relating to its deliberate conduct that resulted in the impairment of Chrysler’s business.”
Daimler spokesman Han Tjan said Cerberus performed due diligence before the sale and was given all the information it needed to close the deal.
How badly is Cerberus regretting the mess it got itself into when it acquired Chrysler? You have to wonder how much due dilligence Cerberus actually did. Remember, that was a totally different time for private equity, when the name of the game was to slash costs, enjoy uber-low borrowing rates, IPO the stock and profit. Now they’re begging for a bailout, or a merger, and their brilliant MBA-CEO is spending his time carpooling back and forth to DC.
As the picture above confirms, those were much happier times.
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