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Carl Icahn in a legal battle with Motorola

by Abhishek Garg - March 25, 2008 - 0 comments

Carl Icahn, who is the second largest shareholder in Motorola with 6.4% shares, has turned to legal help, in order to seek documents about its mobile devices business and senior executives.

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[quote=Abhishek Garg]<div class="flexinode-body flexinode-1"><div class="flexinode-textarea-1"><div class="form-item">
 <p>Carl Icahn, who is the second largest shareholder in Motorola with 6.4% shares, has turned to legal help, in order to seek documents about its mobile devices business and senior executives.</p>
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 <img alt="Carl Icahn in a legal battle with Motorola" src="http://www.themoneytimes.com/filess/_40691792_carl203ap_sm.jpg" /><br /><a href="http://www.themoneytimes.com/filess/_40691792_carl203ap.jpg">Get original file (12KB)</a>
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 <p>Icahn said that he had failed to get access to some documents and records related to the selection of senior officers as well as the "prospects and strategy" of the mobile-device business, including details on board discussions about the potential spin-off and the unit's performance.</p>
<p>It is notable that the company has lost its market share over the past 18 months. Icahn feels that it is not just heavy competition but, the failure of board members which has caused the losses.</p>
<p>"Over the past 12 months the statements and predictions of Motorola's management and the board about mobile-devices business have too often proven to be wrong," said Icahn.</p>
<p>He said that he is sure of getting proof of board’s incompetence through these documents and that is why he is being denied access to these records. </p>
<p>He said, that the items he seeks would help him ascertain what the board could have done, to assure shareholders that the company's comments weren't incorrect and wouldn't give shareholders an inaccurate perspective on the prospects of  the mobile devices business.</p>
<p>Icahn specifically questions the selection of Chief Executive Greg Brown, who he believes "has no in-depth experience or knowledge" of the mobile-device business. He wants Keith Meister, chief executive of Icahn Enterprises and manager of Icahn's $8 billion fund to be a director in the board.</p>
<p>Motorola had earlier rejected Icahn's request for an extensive access to its books, but instead offered him information about the company under a confidentiality agreement, but Icahn had declined the offer.</p>
<p>He has also sent a letter to the other shareholders of Motorola, urging them to vote for Icahn's different slate of directors.</p>
<p>"2008 was supposed to be a successful and profitable year in Mobile Devices with the potential to achieve 10 percent operating margins in the near future," Icahn wrote in the letter. "Instead, the results are a stockholders' nightmare."</p>
<p>In a suit filed by The Icahn Group in Delaware Chancery Court on Monday, the group said that it demanded these materials for the purpose of investigating whether the board of directors of Motorola failed in their duties as directors.</p>
<p>Motorola shares closed up nearly 5 percent at $9.69 on the New York Stock Exchange. Company’s shares have lost 63 percent of their value since mid-October 2006.</p>
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