Steel Partners Fires Back At Lawsuit Over Fund Plans

Jan 29 2009 | 1:23am ET

Activist hedge fund shop Steel Partners has finally responded to the barbs slung at its plan to list its flagship fund by fellow activist Carl Icahn.

Responding to a lawsuit filed earlier this month by an Icahn-controlled company and Bank of America, Steel asked the Delaware Chancery Court for a dismissal, calling it “utterly without merit.”

At issue is Steel’s plan, revealed last month, to take its Steel Partners II fund public. The New York-based firm last month merged the hedge fund with Utah-based WebFinancial Corp.—an unlisted industrial loan company that it bought for the purpose of combining it with Steel II. Steel hopes to hold an initial public offering of the combined entity later this year.

But BofA and Icahn has railed against the plan, calling it “a classic ‘bait and switch.’” According to the lawsuit, Steel’s Warren Lichtenstein had assured Icahn last month that investors would be notified of the plan and no action would be taken until at least next month.

For its part, Steel says that Icahn is simply “looking for a scapegoat” for the fund’s investment losses.

“Because it is so obvious that plaintiff’s claim boils down to nothing more than one for an award of $15 million in damages (at the absolute most), plaintiff’s motion is so utterly without merit as to be frivolous and worthy of sanctions” against BofA and ACF Industries, the Icahn-linked railway car component manufacturer that is invested with Steel II, Steel’s lawyers wrote to the court.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.