Icahn's Case Against Dell Heads to Court Monday For Hearing


Carl Icahn will get his first crack at scuttling Michael Dell's $24.4 billion buyout deal at a hearing set for Monday in a Delaware Court of Chancery courtroom. The date was set Thursday and the hearing will determine whether to expedite Icahn's lawsuit, which was filed Aug. 1.

Icahn and financial partner Southeastern Asset Management sued Dell in an attempt to, among other things, stop a change in the record date -- the date shareholders must have owned shares to be eligible to vote -- and force Dell to hold the annual meeting and the shareholder vote on the same day.

At Monday's hearing Icahn will push to have the Delaware court schedule a hearing to consider his claims that the annual meeting and shareholder meeting should be held before Sept. 15 on the same day.

The court proceedings are part of the larger drama involving Michael Dell's attempt to take Dell private and reinvent the company out of the spotlight of Wall Street investors. Activist investor Icahn has thrown a monkey wrench in Michael Dell's efforts and proposed a counteroffer that would oust CEO Dell, replace the company's board of directors and keep the company public.

[Related: Dell Buyout Vote: 10 FAQs And Answers]

The hearing Monday is a reaction to Dell accepting an offer from Michael Dell to sweeten the terms of his buyout offer in exchange for rule changes in a shareholder vote that has been postponed three times and is now set for Sept. 12.

Delaying the vote and changing the record date gives Michael Dell and Silver Lake an advantage in a close shareholder vote, allowing them to sway undecided voters to their privatization bid, according to John Doggett, business management expert and lecturer with the Department of Management, McCombs School of Business, at the University of Texas.

While Icahn challenges the sale process, Michael Dell has been honing his message to his staff. In an email sent to Dell employees ThursdayCEO Dell shed little insight into the ongoing buyout battles.

"We'll retain the flexibility to invest in groundbreaking innovation both through organic R&D and acquisitions. Investments will focus on extending our solutions capabilities, expanding sales coverage, competing in emerging markets, growing the PC and tablet business, and enhancing the customer experience," wrote Michael Dell. "Dell needs to transform, and we need to do it quickly. The technology landscape has fundamentally changed since the company was founded, and success requires this transformation."

PUBLISHED AUG. 9, 2013