Icahn Partners LP, High River LP v. Motorola Inc., CA3642, Delaware Chancery Court
>> Icahn Demands Access to Motorola's Strategy Documents
By Crayton Harrison
Bloomberg (Update4)
March 24, 2008
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Carl Icahn, the billionaire investor fighting for board seats at Motorola Inc., demanded access to documents that detail the strategy for turning around the money-losing mobile-phone business.
Icahn filed a lawsuit today in Delaware Chancery Court in Wilmington to get the information from Motorola, the biggest U.S. mobile-phone maker. The company denied an earlier request for the documents, said Icahn, who has nominated four directors and lobbied for a spinoff of the handset unit.
The lawsuit may step up pressure on Motorola Chief Executive Officer Greg Brown, who is trying to win back customers after handset shipments fell 38 percent last quarter. Brown has replaced at least four executives since taking over in January and is searching for a way to take sales from Nokia Oyj and Samsung Electronics Co.
``These guys are the poster boy for what's wrong with corporate America,'' Icahn, 72, said today in an interview. ``They've lost $37 billion in market value in the last year and a half, and they still refuse to put a representative of shareholders on the board.''
Motorola spokeswoman Jennifer Erickson didn't return phone messages seeking comment.
Motorola denied Icahn's request because he sought an ``unusually expansive range of documents'' and didn't give a credible reason for suspecting the company is being mismanaged, according to a March 20 letter from lawyer Donald J. Wolfe Jr. of Potter Anderson & Corroon. The letter was filed as an exhibit in Icahn's lawsuit today.
Shares Gain
Motorola, based in Schaumburg, Illinois, rose 49 cents, or 5.3 percent, to $9.74 at 2:56 p.m. in New York Stock Exchange composite trading. The stock had dropped 42 percent this year before today.
The suit was filed to ``seek to provide the shareholders additional information demonstrating serious mismanagement at Motorola,'' Icahn said in court papers. ``Where was the board during this period as the mobile devices business fell apart?'' his lawyers ask in the suit.
Brown has ``no knowledge'' of the handset business, Icahn said in the interview. The company's stock price assigns no value to the phone unit, he said. He declined to say what he thinks the division is worth.
Icahn's Nominees
Icahn, who owns about 6 percent of Motorola's stock, nominated Frank Biondi Jr., William Hambrecht, Lionel Kimerling and Keith Meister to the board. The vote on nominees is scheduled to take place May 5 at Motorola's annual meeting.
Meister is principal executive officer of Icahn Enterprises LP, the holding company for Icahn's hedge funds. Biondi is the former CEO of Viacom Inc., while Hambrecht founded securities firm WR Hambrecht & Co.
The last nominee, Kimerling, is an engineering professor at the Massachusetts Institute of Technology. All the nominees are ``independent of Icahn'' except for Meister, according to the investor's statement today.
Brown took direct control of the handset unit from Stu Reed, Motorola said Feb. 4. Reed left the company about a month later. Chief Marketing Officer Casey Keller, treasurer Steve Strobel and European mobile-phone unit head Mike Fenger also have departed.
The case is Icahn Partners LP, High River LP v. Motorola Inc., CA3642, Delaware Chancery Court (Wilmington). ###
- Eric - |
