March 30, 2011 / 9:59 PM / in 7 years

Icahn's lawsuit against Lions Gate dismissed

NEW YORK (Reuters) - Billionaire investor Carl Icahn’s lawsuit contending that Lions Gate Entertainment Corp directors schemed to block his takeover bid was dismissed by a New York court.

In a ruling on Wednesday, State Supreme Court Justice O. Peter Sherwood deferred to a November 1 ruling by the British Columbia Supreme Court, which had dismissed Icahn’s lawsuit there against Canadian-incorporated studio Lions Gate.

The Canadian court “made a series of detailed factual findings that undercut Icahn’s breach of contract claim,” Sherwood said in court papers.

Icahn had argued that Lions Gate breached a “standstill agreement,” or short-term truce he entered into with the company in July 2010 when he was trying to take control of the studio.

Icahn had said a $105 million debt-to-equity swap the company announced in July 2010 violated that agreement. He said the debt-to-equity swap was a move to dilute his holdings and not to reduce the company’s debt load, as the company said.

Icahn had been building up his stake in the company in an attempt at a takeover. The debt-to-equity swap slashed the stake he had built up over five months to about 33.5 percent from 37.9 percent.

Lions Gate, the studio behind film and television hits such as “Mad Men” and “Precious,” was founded in Vancouver and is now based primarily in California.

Icahn did not immediately return a phone call seeking comment. A spokesman for Lions Gate said the company was pleased by the ruling.

Reporting by Dena Aubin; Editing by Tim Dobbyn

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