Billionaire activist investor, Far Rockaway native and track-and-field stadium namesake Carl Icahn says that the board at Lions Gate Entertainment has conspired with shareholders to hurt his chances at implementing changes at the company.
Lawyers for Icahn are saying that Michael Burns, vice chairman of Lions Gate’s board colluded with investors to dilute Icahn’s holdings. Such a move would put a big cramp in Icahn’s ability to replace the board of directors at the company. Says Bloomberg:
Icahn is trying to reverse a debt-for-equity swap that hinders his hostile bid for the studio by putting more shares in the hands of opponents. Icahn, 74, contends in documents filed with the court that Lions Gate executives and investors executed the deal at a price below what Icahn was offering at the time.
Icahn’s lawyers are saying that even hyperbole can’t begin to describe what officials at Lion’s Gate did “in the dead of the night on July 20, 2010.” According to Icahn, the debt-for-equity swap was only meant to weaken his position in the company and not to shore up the firm’s finances. As a result of the deal, Icahn’s stake in Lions Gate dropped to 33.5 percent from 37.9 percent.
Icahn has been in a fight with Lions Gate for well over a year now. His mission is to cut spending at the company, and he once campaigned aggressively against proposed purchases of other film studios like MGM and Miramax, but now supports a merger with MGM.