Wilmington, Del. ? Executives from Daimler-Benz engaged in “plain, old-fashioned fraud” during merger talks with Chrysler five years ago, an attorney representing billionaire investor Kirk Kerkorian told a federal judge Monday.

“Because of the lies, defendants were able to take over Chrysler, drive out the senior leaders at Chrysler and replace them with Daimler executives from Germany,” Terry Christensen, who represents Kerkorian’s Tracinda Corp., said during opening arguments in U.S. District Court.

Monday marked the first day of a trial that is the culmination of a three-year battle between Tracinda and German-American automaker DaimlerChrysler AG.

DaimlerChrysler says the 1998 merger was one between equals, a trans-Atlantic union that created a global automotive giant. Tracinda claims the deal was a veiled takeover, orchestrated to bilk shareholders out of billions in compensation.

“DaimlerChrysler AG is a merger of equals, and it always has been,” Jonathan Lerner, an attorney for the automaker said in his opening argument.

He said Kerkorian, a Chrysler shareholder, always knew what was going on with the company and with changes in the staff, but didn’t do anything until his stock price began falling.

“This case is about DaimlerChrysler’s sagging stock price and a major investor who sat on his stock too long,” Lerner said.

The trial, expected to last about two weeks, was to feature testimony from the reclusive Kerkorian and top executives of DaimlerChrysler, including chairman Jurgen Schrempp. Also set to testify is former Chrysler Corp. chairman Robert Eaton, Kansas University graduate, a central figure in the deal’s negotiations.

Kerkorian, who was not present in court Monday, sued DaimlerChrysler in 2000 after the London-based Financial Times quoted Schrempp as saying he never meant for the 1998 merger to be one of equals, and that the deal was billed that way “for psychological reasons.”

Chrysler shareholders, including Kerkorian, claim they were duped into approving the so-called merger when in reality Daimler-Benz was acquiring Chrysler.

Kerkorian, whose Tracinda investment arm once held 14 percent of Chrysler’s stock, says Schrempp, then Daimler-Benz chairman, and other company officials misled shareholders to cheat them out of an acquisition fee that would have been due had Chrysler been purchased.

Some observers have estimated a judgment for Kerkorian could amount to $3 billion to $4 billion.

Kerkorian amassed a vast fortune in the hotel, movie, airline and auto industries. Forbes magazine this year ranked him as the 33rd richest American, estimating his net worth at $5 billion.

In 1995, Kerkorian tried unsuccessfully to seize control of Chrysler with a $23 billion hostile bid. He had been Chrysler’s biggest shareholder.

Last week, U.S. District Judge Joseph J. Farnan Jr., who is hearing the case without a jury, rejected DaimlerChrysler’s final attempts to have the case dismissed, saying evidence suggests the deal was a covert takeover from the outset.

“Tracinda’s evidence demonstrates that defendants mounted a full-scale communications campaign aimed at concealing their intent to take control of Chrysler and pressing the ‘merger of equals’ concept,” Farnan said in a ruling.

In August, DaimlerChrysler agreed to pay $300 million to settle a similar class-action lawsuit filed by other investors who also claimed they were misled about the deal. It said the suit was groundless and settled only because “a local jury could reach a different conclusion.”