BOSTON Jan 28 Steel Partners this week asked a
Delaware court to dismiss a lawsuit filed against the hedge
fund firm by billionaire investor Carl Icahn, saying he is
"looking for a scapegoat" for investment losses that happened
as the financial crisis deepened.
Steel Partners said the suit, which claims it committed
fraud, has no merit.
The court papers were made public on Tuesday.
Two weeks ago ACF Industries, a railcar component maker
closely associated with Icahn, sued Steel Partners in Delaware
Chancery Court, saying the fund firm failed to properly inform
investors about plans to turn one of its funds into a public
"Because it is so obvious that plaintiff's claim boils down
to nothing more than one for an award of $15 million in damages
(at the absolute most), plaintiff's motion is so utterly
without merit as to be frivolous and worthy of sanctions,"
Steel's lawyers wrote to the court.
Icahn's ACF Industries claimed that Steel Partners was not
in compliance with its obligations to investors as it pursued
its plan to become a publicly traded partnership because it
failed to give ample notice of the plan or an opportunity to
vote on the proposal.
After simmering in private for some time, the matter
received public attention this month when Icahn filed his suit
and followed up last week with a public plea to other investors
to join his cause.
Just three years ago Icahn and Steel Partners worked
together as allies in pressing South Korea's top tobacco maker
KT&G (033780.KS) to increase corporate value.
(Reporting by Svea Herbst-Bayliss, editing by Maureen Bavdek)