Hedge fund Q Investments has launched a new front in its legal battle with Carl Icahn over the latter’s plan to sell $2 billion in senior debt to fund a refinancing.
Q’s Nineteen Eight-Nine LLC filed suit against Icahn Enterprises, which is controlled by Icahn’s hedge fund Icahn Associates, saying that the legendary investor’s claim that he controls more than 75% of auto parts supplier Federal-Mogul Corp.
Icahn’s claim that his firm owns 75.7% of Federal-Mogul “is a materially misleading representation, as it fails to tell potential investors that IEP’s ultimate interest in FMO may be significantly less than 75.7%.
That’s because Q, in a separate lawsuit against Icahn, claims that he stabbed them in the back when he acquired a controlling stake in Federal-Mogul after it emerged from bankruptcy. Prior to its exit from bankruptcy, Icahn Enterprises and Q struck a deal to share profits from their investment in the company, in which they held a combined blocking position.
Instead, Icahn bought a 50.1% stake from the Federal-Mogul Asbestos Trust. Q says it is entitled to some of those shares.
Nor is that Q’s only legal fight with Icahn. Over the summer, its R2 Investments fund accused Icahn of violating the rights of shareholders of telecommunications company XO Holdings.