Icahn loses appeal against Lions Gate in Vancouver court
Carl Icahn continues to rack up losses in his legal battles with Santa Monica-headquartered film and television studio Lions Gate Entertainment.
Three judges in the British Columbia Court of Appeals on Tuesday dismissed the billionaire investor's appeal of a ruling issued in November in favor of Lions Gate. A Supreme Court judge in British Columbia, where Lions Gate is legally domiciled, at the time denied Icahn's request to throw out a controversial debt-for-equity swap that diluted his stake in the company.
Icahn, Lions Gate's largest shareholder, has blamed that transaction for the failure of his effort to elect a dissident slate of nominees to the company's board of directors at its annual meeting in December.
The corporate raider filed lawsuits in British Columbia and New York to undo the debt-for-equity swap, which increased the stake of management-friendly shareholder Mark Rachesky and diluted all others including Icahn. The New York case was dismissed in March.
Tuesday's decision is a blow to Icahn and ends what appears to be his last effort to undo the transaction and bring his ownership of the company back up to 38% from 32.8%. A larger stake would make it easier for him to influence the company and potentially elect directors at the fall annual meeting who agree with his view that current management, led by Chief Executive Jon Feltheimer and Vice Chairman Michael Burns, should be replaced.
"We are pleased that the Court of Appeal for British Columbia has upheld the British Columbia Supreme Court decision dismissing Mr. Icahn's complaint," a Lions Gate spokesman said in a statement.
Icahn did not immediately respond to a request for comment.
A lawsuit filed by Lions Gate against Icahn in New York was partially dismissed in March. However, it is proceeding on the question of whether Icahn improperly failed to disclose an agreement to give investor Mark Cuban "special consideration" for selling his 5.4% stake in the studio.
-- Ben Fritz