Lions Gate’s Suit Against Icahn Takes Another Hit

MANHATTAN (CN) - Only one count remains from Lions Gate's complaint against financier Carl Icahn, whom the production company claims is a "corporate raider."

British Columbia-based Lions Gate is the most commercially successful independent movie and TV production companies, according to industry watchers. Its recent hits include the Emmy award-winning TV show "Mad Men" and the Academy award-winning film "Precious: Based on the Novel 'Push' by Sapphire."

The company sued Icahn in November for tortiously interfering with its plan to merge with MGM (Metro-Goldwyn-Meyer) as a tactic to depress share prices and stall the deal until Icahn could buy up shares in both companies to benefit from both sides of the transaction.

In his ruling Wednesday, U.S. District Judge Harold Baer noted that three of Lions Gate's five claims have already been dismissed or withdrawn, and a fourth will also not make it to trial.

The newly tossed claim's concerns Lions Gate's theory that Icahn concealed his plans regarding a possible Lions Gate-MGM merger and his standing agreement with another financier, Mark Cuban. Lions Gate had claimed that Icahn violated the Securities Exchange Act of 1934 by failing to report an arrangement to buy Cuban's 5.4 percent share in Lions Gate for special consideration.

Icahn booted the claim by noting that he mooted the alleged disclosure deficiency in amending his Schedule 13D filing.

Lions Gate's lone remaining claim concerns Icahn's alleged arrangement to buy Cuban's bloc at just $7 a share, even though Lions Gate says it offered Cuban more money, because Icahn sweetened the deal.

Icahn and his affiliates sued Lions Gate in August 2010, claiming the company was blocking him from buying enough shares in the company to elect a board member, and that Lions Gate schemed to "consolidate control in management-friendly hands."

The August lawsuit describes Icahn's "growing concerns about the management of Lions Gate, including rapidly growing overhead expenses, increasing financial exposure to internally developed and risky theatrical releases, and the company's acquisition of high-priced distressed assets."

After MGM rebuffed Icahn's encouragement to merge with Lions Gate, electing instead to merge with Spyglass, it filed for Chapter 11 bankruptcy with more than $4 billion in debt.

Lions Gate is represented by William Savitt with Wachtell, Lipton, Rosen & Katz. Icahn is represented in his suit by Joseph DiBenedetto with Winston & Strawn.

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