March 24, 2008 10:24 AM PDT

Icahn sues for access to Motorola documents

Posted by Richard Defendorf

Updated 8:10 a.m. Pacific time to include Motorola's offer to Icahn of two board seats.

Carl Icahn is still dogging Motorola. On Monday, the billionaire investor said his investment company, the Icahn Group, filed a lawsuit intended to force Motorola to hand over documents related to its mobile devices business and use of corporate aircraft by senior managers, board members, and their families, Reuters and other news agencies reported.

Saying the information will help him determine what Motorola's board should have done to help the company right its ailing handset business, Icahn added that he intends to share it with shareholders, who recently have seen the departure of former CEO Ed Zander, the appointment of Greg Brown to the top spot, and several other excutive-level changes. The suit also is aimed at encouraging investors to elect Icahn's slate of candidates to the Motorola board.

"Over the past 12 months, the statements and predictions of Motorola's management and the board about mobile devices business have too often proven to be wrong," Icahn wrote in a note to investors. "We want to ascertain what the board could have done in the exercise of its fiduciary duty to assure Motorola stockholders that Motorola's statements and predictions were not incorrect."

"We demanded these materials," he added, "for the purposes of enabling us to investigate whether and to what extent the board of directors of Motorola failed in their duties as directors in supervising management and setting policy and direction of Motorola."

Motorola has attempted at least a partial dodge of Icahn's advances. The Wall Street Journal, in a story published Tuesday, says that Motorola offered him two board seats--a gesture Icahn rejected.

Given Icahn's persistence, his rationale for making the company's handset division independent, and his growing clout with shareholders, the WSJ story points out, it's increasingly likely he'll realize his ambition to win four seats on Motorola's board.