A war of words erupted Wednesday between Daimler AG and Cerberus Capital Management LLC over the terms of the German automaker's sale of a majority stake in Chrysler LLC to the private equity firm.

The dispute could jeopardize Cerberus' purchase of the rest of Chrysler and may have to be settled in court.

The two companies are sparring over the amount New York-based Cerberus paid Daimler last year for an 80.1 percent stake in Chrysler Holding LLC, which comprises the automaker and Chrysler Financial, and how accurate and open Daimler was about the health of Chrysler.

The clash has stalled talks to sell the remaining 19.9 percent of Chrysler to Cerberus.

"Obviously it complicates Daimler's exit strategy," said analyst Joe Phillippi of AutoTrends Consulting in Short Hills, N.J.

The standoff comes at a time when Daimler has reduced Chrysler's value as an asset to zero, and as Cerberus seeks full ownership of the automaker.

Daimler sold the bulk of Chrysler to Cerberus last year in a $7.2 billion deal and Cerberus said earlier this year that it wanted to buy the rest of the Auburn Hills automaker. Daimler expected that transaction would be completed long before now, according to Daimler spokesman Han Tjan. Tjan said the delay and repeated requests for updates on the progress of the negotiations prompted it to release a statement Wednesday that was critical of Cerberus.

"They spent $7.2 billion in acquisition of 80.1 percent," Tjan said. "Now they say we actually want more than that amount from you."

Daimler considers Cerberus's demands "exaggerated," and said they go "beyond the framework of the contractually agreed possible obligations under representations and warranties."

Daimler is also angry that Cerberus has alleged that it did not provide full and complete information about Chrysler when the sale was negotiated. "These allegations are absolutely absurd," Tjan said.

Cerberus responded Wednesday with a statement of its own, charging that Daimler "intentionally and materially" misled Cerberus about Chrysler's health before the firm bought its stake in the automaker. Cerberus alleges that Daimler misrepresented changes in its underwriting practices related to vehicle financing and leasing that affect the overall value of Chrysler.

"We are disappointed that Daimler has refused to negotiate in good faith in the face of the plain facts of which they are well aware," Cerberus said in the statement. "Accordingly, we are considering our strategic options and will have further comment after assessing the effects of Daimler's recent actions."

A Cerberus spokesman would not elaborate on the statement.

"They're claiming the $7.2 billion they paid is in excess of fair value," Phillippi said, which suggests Daimler engaged in somewhat fraudulent practices. "I don't think (Cerberus) would do this unless they thought they had a good case and could defend it in court."

Tjan said Daimler provided Cerberus with accurate and relevant information.

Cerberus conducted due diligence and "had access to everything they needed to see" for more than a year, he said. In fact, Daimler extended the period when warranties and guarantees were valid from Sept. 3 to the end of October.

"When there are teams of accountants going through things piece by piece, theoretically there shouldn't be any surprises," Phillippi said. "Obviously stuff gets missed, but not big glaring items."

The valuation of Chrysler has also come into play in negotiations with the Renault SA-Nissan Motor Co. alliance, which was in discussions with Cerberus earlier this year about a possible tie-up. Those talks were put on hold when it became clear that Cerberus wanted to do a deal with General Motors Corp. to sell Chrysler.

The fallout from the Daimler-Cerberus dispute is that talks concerning the sale of the final stake of Chrysler to Cerberus have stalled. "(Daimler) would love to get it off their books," Phillippi said.

Both sides say a peaceful resolution is still possible, but lawsuits are not being ruled out. The threat of lawsuits could be the catalyst to reach an agreement, Phillippi said.

"We still hope to come to a conclusion for the 19.1 percent," Tjan said.

Chrysler officials would not comment except to say they too, are confused by the circumstances.

The auto market has changed dramatically since Cerberus acquired Chrysler with plummeting U.S. auto sales and a financial crisis that has contributed to a cash drain at Chrysler. Chrysler sales fell 35 percent in October from a year earlier and are pacing down 26 percent through October.

Cerberus has recorded substantial losses since it purchased the majority stake in Chrysler: $1.6 billion last year and $1.28 billion in the first half of this year.

Since Chrysler is privately owned, the company does not have to report its earnings, but they can be calculated from Daimler's balance sheet.

Chrysler has joined GM and Ford Motor Co. in seeking a $25 billion in federal loans to keep them afloat until the market improves.