WILMINGTON, Del.--Carl Icahn has expanded his lawsuit
challenging Dell Inc.(DELL) over the looming shareholder vote on a
$24.8 billion buyout offer, asking a corporate law judge to take
charge of the timing of the company's annual meeting.
Dell has set an Oct. 17 date for its annual meeting, where Mr.
Icahn wants shareholders to vote out the board and vote in
directors who will advocate his proposal for a plan in which the
company would borrow money to pay out to shareholders, who would
continue to own a stake in the company. However, the company has
set Sept. 12 as the date for a special meeting where shareholders
will decide whether to take the buyout offer, which comes from
Michael Dell and Silver Lake.
The billionaire activist says shareholders won't get a fair shot
at choosing his offer, due to the timing of the votes and other
recent changes the company's board adopted to rules for balloting.
Dell's lawyers have said the company did not run afoul of any law
or duty by making sure Mr. Dell's buyout offer gets voted upon
first, or by moving the record date on the vote from June to
August, in exchange for a $350 million improvement in the cash
going to shareholders.
Mr. Icahn sued earlier this month, asking for a ruling that
Dell's board violated its duties to shareholders by splitting the
votes on the two proposals, and making other modifications to the
balloting on the buyout. In new papers filed Tuesday, Mr. Icahn
added claims based on a statute designed to make sure corporate
boards don't overlook shareholder voting rights by skipping annual
meetings. Dell's last annual meeting was 13 months ago Tuesday.
Under the law, Mr. Icahn's attorneys say, Chancellor Leo Strine can
now "summarily order" Dell to hold an annual meeting.
The fact that Dell has already scheduled an annual meeting for
October does not undercut his rights, Mr. Icahn contends. What
Delaware corporate law does for him is make it clear the judge has
authority over the timing of Dell's annual meeting, his attorneys
say.
Dell's attorneys and spokesman didn't immediately respond to
requests for comment.
"By imposing a delay between the special meeting and the annual
meeting, the directors deliberately are preventing the stockholders
from voting to remove the board and deciding upon an alternative
and superior proposal made by plaintiffs and others--a leveraged
recapitalization of the company," Mr. Icahn's attorneys wrote in an
amended lawsuit filed Tuesday in Delaware's Court of Chancery.
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