Carl Icahn's Suit Thrown Out by Canadian Court
British Columbia judge calls investor a "bitter bidder," reduces Icahn's stake in the mini-studio from 37.5 % to 33.5%.
TORONTO – On Monday, a British Columbia Court judge threw out a lawsuit brought in July against Lionsgate Entertainment for allegedly conspiring to thwart Carl Icahn's takeover bid for the mini-studio thrown.
In dismissing the legal challenge and awarding Lionsgate costs, also branded the billionaire investor a "bitter bidder."
"In the circumstances the actions of Lions Gate were neither oppressive, nor unfairly prejudicial," Justice Savage of the British Columbia Supreme Court said of a $100 million debt-for-equity swap that reduced Icahn’s stake in the mini-studio from 37.5% to 33.5%.
The Canadian court refused to rescind the July note exchange and new share issue that effectively raised a stake held by rival shareholder Mark Rachesky from 19.9% to 28.9%, at the expense of Icahn’s own holding.
Icahn losing his legal challenge against Lionsgate also calls into question his on-again, off-again bid to acquire control of the Vancouver-based mini-studio just days after he and Lionsgate lost a joint bid to merge with MGM.
The British Columbia court rejected Icahn’s case that the debt-for-equity swap aimed to strengthen the mini-studio’s board of directors and thwart any attempt to carry out a proxy fight at Lionsgate’s next annual shareholder meeting.
"In my opinion the Icahn Group has failed to show that the Lionsgate board was acting to entrench themselves," Justice Savage said in his ruling.
"In my view, the Icahn Group complains of conduct which affects it not as a shareholder but as a bitter bidder. It therefore does not have standing to bring this application," the court added in throwing out the lawsuit.