Icahn lawyers to claim Lionsgate conspiracy
Legal team expected to charge that studio tried to thwart bidTORONTO -- Lawyers for billionaire investor Carl Icahn will tell a Canadian court Tuesday that executives and investors at Lionsgate conspired to thwart his bid to take over the mini-studio.
"No hyperbole can truly capture what was accomplished by the management and directors of Lions Gate in the dead of the night on July 20, 2010," Icahn's lawyers argued in a pre-hearing filing to the Supreme Court of Canada, Reuters reported on Friday.
The filings are related to a July lawsuit brought by Icahn against Vancouver-based Lionsgate over a debt-to-equity swap that involved Mark Rachesky, a major shareholder and former Icahn protege.
The suit asks the British Columbia court to rescind a transaction that converted $100 million in senior notes to equity, and which effectively raised Rachesky's stake in Lionsgate while reducing Icahn's stake in the Vancouver-based company from 37.3% to 33.5%.
Lionsgate, in its own court filing, argues the debt reduction had a beneficial impact on the mini-studio, and cited Moody's lifting the company's debt rating from stable to positive in the wake of the transaction.
The British Columbia court has scheduled three days of hearings from Tuesday.
The court's eventual ruling is expected to impact greatly on Icahn's on-going bid to acquire control of Lionsgate, where he remains the company's biggest shareholder while on a collision course with its senior management and boardroom.