NY Judge Tosses Icahn Suit Against Lions Gate

Jun 24 2011 | 9:45am ET

It’s curtains for activist investor Carl Icahn’s lawsuit against the board of Lions Gate Entertainment.

A judge in New York has thrown out the suit, which accused board members of conspiring with large shareholders to block Icahn’s hostile bid for the Vancouver-based movie studio.

According to Bloomberg, State Supreme Court Justice O. Peter Sherwood cited the November findings of a Canadian court, which rejected Icahn’s claim that a debt-for-equity swap that diluted his Lions Gate interest was improper, in dismissing the New York breach-of-contract claim.

Icahn, the chairman of Icahn Enterprises, had sued Lions Gate in both New York and Canada in July to reverse a debt-for-equity swap that had increased Lions Gate director Mark Rachesky’s stake in the studio to almost 29%. Icahn pulled the plug on his hostile bid for the studio last December, after a New York judge ruled that Rachesky could keep his increased voting power.

“In light of the detailed findings of the Supreme Court of British Columbia, Canada, the court has determined to grant defendants’ motion,” Sherwood wrote in his decision. “The complaint will be dismissed.”

Lions Gate, which produced “Precious,” “American Psycho” and the TV show “Mad Men,” said in a statement that it was pleased with Sherwood’s ruling.

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