Billionaire Investor Carl Icahn Faces Pension Suit Over Energy Deal

Pension funds are aiming to bar billionaire investor Carl Icahn from accumulating more shares of CVR Energy Inc.

(June 6, 2012) — Billionaire investor Carl Icahn has been sued by pension funds over his attempt to gain a 90% share of CVR Energy Inc, a refiner and marketer of petroleum fuels.

The plaintiffs are the City of Tamarac Firefighter Pension Trust Fund and the City of Miami General Employees’ and Sanitation Employees’ Retirement Trust.

The suit accuses CVR Energy Inc’s biggest shareholder of freezing out minority investors. The suit also aims to thwart Icahn from gaining additional stock. A 90% share of the company by Ichan would result in CVR’s shareholders’ being “squeezed-out of their investment,” according to a complaint made public today in Delaware Chancery Court and obtained by Bloomberg.

“The cure is simple — adopt a poison pill that forces Icahn to negotiate a buyout price rather than allow him to conduct an open market scheme to game Delaware law,” the funds said in the complaint.

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In January, Icahn disclosed a 14.5% stake in CVR, which owns oil refineries in Kansas and Oklahoma capable of processing a combined 185,000 barrels daily, and began putting pressure on the board to put the company up for sale. Since then, Icahn has increased his stake in CVR to 80%.

In a March 28 statement, Icahn criticized the company for being too small and not adequately diversified to compete in a cyclical industry of refining.

Mark Lebovitch of Bernstein Litowitz Berger & Grossmann LLP in New York and Stuart Grant of Grant & Eisenhofer LLP in Wilmington, Del., are representing the plaintiffs.

The case is City of Tamarac Firefighter Pension Trust Fund v. Icahn, CA7597, Delaware Court of Chancery (Wilmington).

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