Icahn Seeks Backing In Steel Battle

Jan 27 2009 | 9:32pm ET

Billionaire activist hedge fund manager Carl Icahn is stepping up his battle with fellow activist Steel Partners.

An Icahn affiliate and Bank of America have sued New York-based Steel over its plan to turn its flagship hedge fund into a publicly-listed vehicle. Steel, in turn, has refused to turn over to its antagonists a list of its investors, so Icahn has written an open letter to Steel investors, proposing a meeting.

Icahn called the merger of Steel Partners II with Utah-based WebFinancial Corp.—an unlisted industrial loan company that it bought for the purpose—with plans to have it go public later this year “extremely detrimental to all of our investments.” The lawsuit, filed in Delaware Chancery Court earlier this month, called the plan “a classic ‘bait and switch.’”

Icahn’s letter asks Steel clients to call his office and provide a name and phone number, with plans to schedule a meeting “to share our thoughts and concerns.”

According to the lawsuit, Steel’s Warren Lichtenstein assured Icahn last month that Steel would notify investors about his plan and that no action on it would be taken until at least February.


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