Lionsgate is suing Carl Icahn in the latest episode of the year’s most venomous Hollywood soap opera.
The mini-major claims Icahn publicly opposed a merger between it and MGM in order to delay such a move until he would be in a better place to benefit from a transaction.
In papers filed in federal court in New York , Lionsgate alleges Icahn made false and misleading statements to public investors about the wisdom of a merger while he was quietly accruing MGM stock.
The development would appear to favour the bankruptcy plan that creditors will vote on tomorrow . Under that proposal creditors would own roughly 95% of MGM and place the stricken studio under the stewardship of Spyglass co-founders Roger Birnbaum and Gary Barber.
On Wednesday  Icahn offered to acquire MGM creditors’ debt at 50 cents on the dollar as long as they blocked the Spyglass deal.
Icahn owns in the region of $400m of MGM debt and is a 33% owner of Lionsgate after steadily building his stake in the mini-major from a 19% base back in March. The lawsuit means his dreams of owning one of the most august Tinseltown enterprises could come undone
“Icahn opposed a merger with MGM not because it was bad for Lions Gate shareholders, but because it was good,” papers lodged in court by Lionsgate read, “so good, in fact, that he wanted to postpone it until he could buy as much of both companies as he could and thus extract for himself as much of the value stemming from the merger as possible.”