Part of Lionsgate Suit Against Carl Icahn Dismissed
A judge rejects claims that the billionaire investor failed to disclose plans about a possible merger with MGM.
A Manhattan federal judge has dismissed part of a lawsuit by Lionsgate Entertainment Corp. against Carl Icahn that accused the activist investor of plotting to merge the studio with MGM.
U.S. District Judge Harold Baer on Wednesday rejected claims that Icahn failed to disclose plans about a possible Lionsgate-MGM merger, in violation of securities law. The suit also said Icahn failed to disclose an agreement to buy the 5.4 percent share in Lionsgate owned by financier Mark Cuban, who owns the Dallas Mavericks basketball team.
The judge said Icahn met disclosure requirements with amended securities filings.
Representatives for Lionsgate and Icahn were not immediately available for comment.
The lawsuit filed in October last year accused Icahn of misleading shareholders by characterizing Lionsgate's pursuit of MGM as a "misguided strategy" that would end in "oblivion" and "bankruptcy."
Lionsgate contended that Icahn was secretly plotting to merge the two studios but only after he acquired a large position in both companies at depressed prices.
MGM filed for bankruptcy protection in November after striking an agreement with Icahn to win his support for a restructuring.
Icahn, who for years had criticized management, had launched a hostile takeover bid for Lionsgate.