Icahn Demands $100M From Hedge Funds

MANHATTAN (CN) - Billionaire financier Carl Icahn claims that "secretive and highly litigious Texas hedge-fund promoter" Geoffrey Raynor filed a lawsuit with frivolous and defamatory allegations to derail Icahn's $2 billion bond offering. Icahn demands more than $100 million in damages.

Icahn claims in New York County Court that Raynor's companies have a long history of filing bogus lawsuits against financial corporations to "sabotage" them and "extort a payment for withdrawing their false allegations."

"During the last four years, they have brought about well over 45 lawsuits and are known by some as 'serial suers,'" according to the complaint.

Icahn claims Raynor's companies defamed him in two filings on Jan. 11 this year: a New York Supreme Court complaint and a 13D securities filing that incorporated the lawsuit to give it a "veneer of credibility."

Icahn says Raynor's hedge funds never served him with the lawsuit because Raynor knew the allegations were "false and frivolous."

"As if the twin filings of the 13D and lawsuit were not egregious enough, to date, defendants have never served the lawsuit, despite the willingness to accept service of the lawsuit," the complaint states. "This is no surprise since defendants filed the lawsuit and the 13D, not for the purpose of protecting their financial interest, but as a vindictive and malicious attempt to wreak economic harm on plaintiffs and damage their business reputations, especially Icahn at the exact critical time that plaintiffs were pricing the $2 billion bond offering. In short, defendants' conduct of filing the false and malicious statements in the 13D and the lawsuit entitles plaintiffs to compensatory damages as well as punitive damages."

Icahn's complaint states: "The 13D stated that IEP [Icahn Enterprises] may be materially misrepresenting the nature of its ownership of a 'certain assets.' [sic] The assets referred to are 75 million shares of FMO [Federal Mogul Corp.] equal to $1.2 billion in value."

Icahn says Raynor's lawsuit asked for a constructive trust to be issued over certain shares of FMO, knowing that "this language would certainly frighten many potential buyers of the IEP offering who would, no doubt, wonder what else might lie in the weeds."

But Raynor knew the lawsuit was "a hoax" because "Carl Icahn has indemnified IEP for any damages that might result relating to the FMO stock IEP now holds," according to the complaint. "Consequently, IEP and defendants have absolutely no financial risk.

"Therefore, not only does the Lawsuit and 13D issued on January 11 make false statements but even more importantly, there is no legal reason for their existence. But the Defendants did have illegal reason for taking these actions. It was to sabotage the IEP $2 billion Bond Offering and hope to extort a payment for withdrawing their false allegations," according to the complaint.

Icahn says Raynor's lawsuit and 13D "successfully sabotaged the $2 Billion Bond Offering in several respects" and did more than $100 million in damage to his companies.

Icahn sued Raynor and his companies R2 Investments LDC, Nineteen Eighty-Nine LLC, Amalgamated Gadget LP, Sceptor Holdings Inc., Q Funding LP, Acme Widget LP, and Brandon Teague, alleging tortious interference, injurious falsehood and abuse of process.

Icahn seeks $100 million in compensatory damages, and punitive damages.

He is represented by Steven Storch with Storch Amini & Munves.

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