CSX Chief Feels ‘Targeted’ By TCI

May 22 2008 | 2:00am ET

U.S. railroad giant CSX Corp. yesterday made its case for blocking a group of activist hedge funds’ bid to win representation on its board.

CEO Michael Ward told a federal judge in New York that he negotiated in good faith with London hedge fund The Children’s Investment Fund—which is backed by another hedge fund, 3G Capital Partners. He testified that he “felt targeted by TCI,” saying that the fund planned to oust him if it succeeded in taking control of the board.

The railroad says that TCI violated securities laws by using derivatives to hide part of its stake in the company. CSX wants the judge to bar TCI from running its slate of five director candidates to the company’s 12-strong board, as well as ban TCI and 3G from voting some of their shares at its June 25 annual meeting and force them to sell part of their stake.

The two funds own a combined 8.7% of CSX, though it owns derivatives that could bring its stake up to 12.3%.

TCI has fired back with a countersuit, accusing CSX of all manner of corporate corruption and malfeasance.

The judge is expected to rule on TCI’s board slate before the annual meeting.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...