Kerr-McGee Corp. filed a lawsuit against financier and shareholder Carl Icahn and his associates on Thursday, hours after Icahn sent a letter to CEO Luke Corbett urging the company to end its exploratory deepwater drilling program because it was costing the shareholders money.

The lawsuit by Kerr-McGee claims that Icahn and his group breached federal antitrust laws and violated of the company’s bylaws. The lawsuit also asks a federal court to bar Icahn and his associates from voting with recently acquired shares, and it seeks to have their nominations as directors nullified.

In a letter to Corbett, Icahn said Kerr-McGee should stop “wasting” the company’s money and said, “We believe KMG can spend its money much more judiciously than to continue spending money on high-risk exploration.” The letter to Corbett also renewed Icahn’s call for the company to sell its chemicals unit and sell up to 32% of future oil and gas production in order to buy back company stock and improve the share price.

Kerr-McGee defended its worldwide drilling program, and said its strategy has been historically successful.

The lawsuit follows several weeks of correspondence and accusations between the company and Icahn’s group. Icahn and related affiliates have bought up about $500 million of Kerr-McGee’s shares, and they now control, with Jana Partners LLC, about 7% of the company (see Daily GPI, March 7).

According to the lawsuit, Icahn and his associates have “harmed the company and its stockholders by allowing defendants improperly to accumulate a sizable position in the company’s stock and to withhold from the company information it needs to respond appropriately to director nominations.”

Mark Weitzen, general counsel for Icahn Investment Partners, told the Associated Press that he had not seen the lawsuit, but he said it was without merit. “It sounds like there is not any substance to it, but we will see them in court,” Weitzen said.

According to Kerr-McGee, Icahn and his associates violated the Securities and Exchange Act by acting as a group without disclosing the group’s existence and the members’ collective intent. The lawsuit also alleges that the group violated antitrust laws because at least one of the partners notified regulators of its share purchases after it acquired more than the limit of $50 million worth of shares.

The lawsuit also claims that the Icahn and his associates have not properly nominated themselves for election to the company’s board because the nomination forms did not identify all the partners behind the nomination. The nomination forms also did not contain all necessary information, including detailed accounts of all company shares the nominees bought or sold within the past two years, according to Kerr-McGee.

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