Aerojet chairman sues CEO over control of firm’s board

Bloomberg

Aerojet Rocketdyne Inc’s chairman and three directors asked a judge to block the CEO and her allies on the board from using company resources in a fight for control of the rocket-engine maker.
A lawsuit revealed long-simmering tensions between Chairman Warren Lichtenstein and Chief Executive Officer Eileen Drake who are at the heart of a proxy battle launched as US antitrust regulators move to block Aerojet’s $4.4 billion takeover by Lockheed Martin Corp. The dispute has left the board split between warring factions.
The board fight surfaced as the unraveling merger complicates Lockheed’s efforts to develop hypersonic weapons — a critical US defense imperative because of recent Chinese innovations — after the company planned to bring Aerojet’s propulsion systems in-house. The buyout also was seen as an early test of President Joe Biden’s push to focus more scrutiny on corporate mergers.
Lichtenstein paints the CEO and her allies as wrongfully using Aerojet resources to bolster their efforts to discredit his slate and win control. The board chairman founded Steel Partners Holding LP, which invested in Aerojet.
“None of the directors has the authority to tap the corporate treasury or the company’s resources, employees or advisors to advantage themselves in the election,” he said in
the Delaware Chancery Court complaint.
A judge set a February 15 hearing on Lichtenstein’s request for a temporary restraining order.
Drake and three other directors filed a countersuit, accusing their opponents of using “improper means” in the corporate clash.
Drake claims a dispute arose with Lichtenstein during the Lockheed deal that resulted in her threatening to leave the company. She accused the chairman of leaking information about their “difficult working relationship,” which prompted Aerojet officials to launch an investigation.
Lichtenstein hoped to derail the investigation with his lawsuit, according to the countersuit. He and “collaborators” on the board intend to mount a “board-room coup” — just as the company tries to salvage the Lockheed transaction, according to the countersuit.
“Mr Lichtenstein, who is completely aligned with fellow shareholders, has operated with integrity and transparency throughout his tenure on the board,” said Charlotte Kiaie, a spokeswoman for the chairman.
The deal took a hit last month when the US Federal Trade Commission sued to block the buyout.