Activist investor Carl Icahn said he is suing Motorola Inc to force it to hand over documents related to its loss-making mobile devices business to determine if its board failed in its duties.
Icahn, Motorola's second-biggest shareholder, is engaged in a proxy battle with the company, proposing a slate of four directors to the board of the No 3 phone maker which has seen its market share plummet in the last year. Motorola said earlier this year it is looking at its options including a separation of its mobile devices business, after pressure from Icahn for such a move.
The Icahn Group said it has filed a lawsuit in Delaware Chancery Court, seeking documents on Motorola's mobile devices business including board discussions about the potential spin-off and the unit's performance. "We demanded these materials 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," Icahn said in a letter to Motorola shareholders on Thursday.
Icahn also asked for documents, if any, showing use of Motorola's aircraft and property by senior management, the board of directors and their families. Icahn holds about 6.3 percent of Motorola, according to March 5 data.
He also questioned whether Greg Brown, recently appointed as chief executive, was qualified to do the job after more than a year of missteps by his predecessors. Icahn promised to share the information with Motorola stockholders, but added that Motorola has said it will not comply.