The Work

November 29, 2010 3:43 PM

Icahn Names Former Winston & Strawn Lawyer to Dissident Lions Gate Board

Posted by Brian Baxter

UPDATE: 12/1/10, 9:45 a.m. Carl Icahn has amended his offer for Lions Gate, according to The New York Times.

Carl Icahn's fight over the fate of Metro-Goldwyn-Mayer might be on hold for the moment, but the activist investor's battle with another movie studio in which he's the largest shareholder, Lions Gate Entertainment, continues.

Lions Gate sued Icahn last month in U.S. district court in Manhattan over a plan by Icahn to merge the Santa Monica, Calif.-based studio with MGM. Earlier this month Icahn lost a Canadian court battle to gain control of Lions Gate by challenging an equity-for-debt swap that diluted the billionaire's stake in the studio, which was founded in Vancouver.

Now acting in a dissident shareholder role, Icahn, who controls 33.5 percent of Lions Gate, has nominated five members to the studio's board, according to the Los Angeles Times. That's two short of the majority needed to take control of the 12-person board but enough to give Icahn a substantial say in how the company is run, the Times reports.

One of those nominees is former Winston & Strawn corporate partner Daniel Ninivaggi, who joined the firm as of counsel in July 2009 after he'd left the firm to serve as general counsel of auto supplier Lear Corporation. Lear filed for bankruptcy that July, only to emerge from bankruptcy protection four months later. The Am Law Daily spoke with Ninivaggi last December when he was named to the board of CIT Group, which also exited Chapter 11 proceedings almost a year ago.

Ninivaggi told us that he landed the CIT work though his relationship with Icahn, who once held a 16 percent stake in Lear before selling it in November 2008. Icahn was part of a steering committee of CIT bondholders that struck a deal with the midsize lender to end its Chapter 11 case after only a month in bankruptcy court.

Since then Ninivaggi has formalized his relationship with Icahn, joining the billionaire's New York-based holding company, Icahn Enterprises, earlier this year as president. At the time, Icahn said of his new hire: "I have known Dan for a number of years and have always been impressed by his intelligence, ability, and work ethic. I believe he will be a great addition to the IEP team and look forward to working with him."

Ninivaggi now finds himself in the middle of a potential proxy fight at Lions Gate, which is scheduled to elect a new board at its annual shareholders meeting on December 14, the Times reports. Other dissident directors nominated by Icahn include former MGM president and COO Christopher McGurk, television producer Jay Firestone, entertainment and marketing executive Michael Dornemann, and former Princeton University president and economics professor Harold Shapiro.

According to Deadline Hollywood, Icahn is seeking to replace current Lions Gate board members G. Scott Paterson, Hardwick Simmons, Mark Rachesky, vice chairman Michael Burns, and cochairman Harald Ludwig.

As previously reported by The Am Law Daily, Lions Gate's board includes several lawyers. Norman Bacal, comanaging partner of Canadian firm Heenan Blaikie, is a director along with the firm's entertainment practice chair Arthur Evrensel. Another director, Morley Koffman, is a founding partner of Vancouver firm Koffman Kalef. All were among the slate of directors unveiled by Lions Gate last week. (Only board member Brian Tobin, a senior business adviser and member of the public policy group at Canadian firm Fraser Milner Casgrain, will not stand for reelection.)

Lions Gate itself has retained Heenan Blaikie along with Canadian firm Goodmans, longtime Icahn nemesis Wachtell, Lipton, Rosen & Katz, and O'Melveny & Myers to fight the takeover bid. The two Heenan Blaikie partners serving on Lions Gate's board are not working with the team from the firm in the matter. (Lions Gate's general counsel is Wayne Levin.)

Canadian firm Osler, Hoskin & Harcourt and Winston & Strawn--Ninivaggi's old firm--are advising Icahn in his effort to gain control of Lions Gate. Reuters reported last week that Winston litigation partners Joseph DiBenedetto, Michael Friedman, and Jennifer Malin had asked a federal judge in New York to dismiss Lions Gate's suit against their client accusing Icahn of secretly plotting to merge the studio with MGM.

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