Icahn Blasts Management in His Texaco Countersuit

Keeping pressure on his target, investor Carl C. Icahn charged in a lawsuit Tuesday that Texaco Inc. has kept “managerial blunders” and material developments secret from its shareholders.

The legal assault follows Icahn’s moves last week to launch a proxy fight for seats on Texaco’s board and his offer to buy the company in a bid that values the firm at $14.5 billion.

Icahn made his claims as part of his response to a lawsuit that Texaco filed against him. He has fought the oil company’s lawsuit with a countersuit.

Texaco has charged that Icahn violated securities laws in acquiring his 14.8% of Texaco and sought to block his takeover bid and proxy fight to win board seats.

In his amended countersuit filed in U.S. District Court in White Plains, N.Y., Icahn charged that Texaco deliberately concealed information, made false and misleading statements to shareholders and engaged in a continuing series of damaging managerial blunders.

In the suit, Icahn said Texaco refused to tell shareholders that it had offered to arrange for a buyer for Icahn’s stock on terms unavailable to other shareholders. He said he rejected the offer.

Texaco called the charges raised by Icahn “utterly groundless.”

Meanwhile, Wall Street sources said Icahn is considering plans to sell Texaco assets, in addition to the two he identified last week, to finance the remaining $12.4 billion he needs to acquire the company. He has scheduled a public meeting with analysts Thursday to disclose more of his plans.