SEC Company Response from LIONS GATE ENTERTAINMENT (STRZ) — Nov 26, 2010

LIONS GATE ENTERTAINMENT CORP /CN/ (STRZ, LGF-A, LGF-B) (CIK 0000929351)
Date: Nov. 26, 2010 · CIK: 0000929351 · Accession: 0000898822-10-000715

View on Edgar

AI Filing Summary & Sentiment

File numbers found in text: 001-14880

Date

November 24, 2010

Author

/s/ David E. Shapiro

Form

CORRESP

Company

LIONS GATE ENTERTAINMENT CORP /CN/ (STRZ, LGF-A, LGF-B) (CIK 0000929351)

Letter

VIA EDGAR AND OVERNIGHT DELIVERY United States Securities and Exchange Commission Office of Mergers & Acquisitions Washington, DC 20549-3628 Re: Lions Gate Entertainment Corp. Definitive Proxy Statement on Schedule 14A filed November 19, 2010 File No. 001-14880

Dear Mr. Hinden:

On behalf of our client, Lions Gate Entertainment Corp. (the “Company”), we are responding to the question of the Staff of the Securities and Exchange Commission (the “Commission”) with respect to the above referenced proxy statement (the “Proxy Statement”), concerning whether the Company’s the filing of a definitive proxy statement without filing a preliminary proxy statement was consistent with Exchange Act Rule 14a-6. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the Proxy Statement.

Response: The Company believes that they were not required by Exchange Act Rule 14a-6(a) to file a preliminary proxy statement. The only matters to be acted upon at the annual meeting to which the proxy relates are the election of the Company’s directors and the election, approval or ratification of the Company’s accountants. The Company recognizes that the exclusions set forth in Exchange Act Rule 14a-6(a) are not available if the registrant comments upon or refers to a solicitation in opposition, which the proxy statement does not. The Company also recognizes that in a telephone interpretation the Staff has stated that if a registrant knows, or reasonably should know, of the solicitation

in opposition, then it should include such information in the proxy statement and file the proxy statement in preliminary form. At the time of the filing of the proxy statement, Mr. Carl C. Icahn and persons affiliated with him (collectively, “Icahn”) had an outstanding tender offer to purchase shares of the company; however had not commenced a solicitation in opposition. For the reasons stated below, the Company does not believe that it is reasonable to conclude that the Company knows Icahn will in fact make any solicitation in opposition.

November 24, 2010

Page 2

In fact, in a proceeding in the Appeal Court of British Columbia on November 4 to expedite an appeal, Icahn’s counsel stated that “Frankly, if [Icahn] loses the appeal he’s not going to compete.” The transcript of this proceeding is attached as Exhibit A (the quoted sentence is found on page 8, lines 34 and 35). Icahn subsequently lost that motion to expedite the appeal to be decided prior to the Company’s annual meeting.

Icahn has interacted repeatedly with the Company over the last several weeks to attempt to settle with the Company and in the course of those conversations has offered to withdraw his pending tender offer and enter into standstill arrangements, including committing not to engage in any proxy contest. Indeed, Icahn recently asked the Company privately to delay its proxy statement and shareholder meeting to permit further settlement discussions. The Company’s understanding from these discussions is that at the time of the filing of the proxy, Icahn was seeking an amicable resolution rather than a solicitation in opposition.

Moreover, it is not clear to the Company which if any Company nominees Icahn opposes from the Company’s slate of nominees. In the discussions with the Company regarding possible strategic opportunities with respect to Metro-Goldwyn-Mayer Studios Inc. (“MGM”), Icahn has expressed interest in having the Company’s management run MGM following a possible takeover and having the Company’s CEO remain on the board of the combined company.

As of the date of this letter, Icahn still has not commenced a solicitation in opposition, notwithstanding that Icahn has been aware that the Company’s meeting is scheduled for December 14 and that there is limited time remaining to solicit proxies in opposition given the upcoming Thanksgiving Day holiday.

The Company notes that while Icahn has made public statements about the possibility of a proxy contest, he has been making such statements and filings for nearly two years without engaging in any solicitation in opposition. For example, on February 23, 2009, Icahn filed a Schedule 13D stating that he “may seek to add nominees” and take “action at the [Company's] next annual meeting of shareholders or at a special meeting which [Icahn] may call.” Notwithstanding these statements, Icahn did not solicit proxies in opposition to the Company’s prior annual meeting nor has Icahn sought to call a special meeting.

November 24, 2010

Page 3

The timing of the Company’s proxy statement and meeting were dictated by Canadian law. Section 182(2) of the British Columbia Business Corporations Act requires that British Columbia corporation’s hold their annual meetings no later than 15 months following the previous year’s annual meeting, which for the Company is December 15, 2010. The Company was enjoined by a British Columbia court from setting its record date until three business days after the court’s decision in the matter, which was delivered on November 1, 2010. The transcript of this proceeding as attached as Exhibit B, and the relevant statement by the court is on page 80, line 47 through page 81, line 2. On November 5, 2010, the Company set its record date for November 12, the earliest day on which it could comply with New York Stock Exchange rules on notice of record dates. The Company also began preparation of its proxy statement and, following updates on the potential for a settlement with Icahn, filed the proxy statement with the Commission on November 19.

Based on the above, the Company concluded that there was no solicitation in opposition and that it was accordingly permitted to file its proxy statement in definitive rather than preliminary form under Rule 14a-6(a).

In addition, the Company hereby acknowledges that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

· Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and

· the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope that the foregoing has been responsive to the Staff’s comments. If you have any questions related to this letter, please contact me at (212) 403-1314.

Sincerely,
/s/ David E. Shapiro

Show Raw Text

CORRESP
1
filename1.htm

corresp.htm - Generated by SEC Publisher for SEC Filing

[Letterhead of Wachtell, Lipton, Rosen & Katz]

November 24, 2010

VIA EDGAR AND OVERNIGHT DELIVERY

Mr. Perry J. Hinden, Special Counsel

United States Securities and Exchange Commission

Office of Mergers & Acquisitions

One Station Place

100 F Street, NE

Washington, DC 20549-3628

Re: Lions Gate Entertainment Corp.

Definitive Proxy Statement on Schedule 14A filed November 19, 2010

File No. 001-14880

Dear Mr. Hinden:

November 24, 2010

Page 2

November 24, 2010

Page 3

In addition, the Company hereby acknowledges that:

· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

· Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and

· the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope that the foregoing has been responsive to the Staff’s comments. If you have any questions related to this letter, please contact me at (212) 403-1314.

Sincerely,

/s/ David E. Shapiro

David E. Shapiro

Exhibit A

CA No. 38552

Vancouver Registry

IN THE APPEAL COURT OF BRITISH COLUMBIA

(Before the Honourable Mr. Justice Low)

Vancouver, B.C.

November 4, 2010

BETWEEN:

ICAHN PARTNERS LP, ICAHN PARTNERS MASTER FUND LP, ICAHN

PARTNERS MASTER FUND II LP, ICAHN PARTNERS FUND III LP AND

HIGH RIVER LIMITED PARTNERSHIP

Petitioners

AND:

LIONS GATE ENTERTAINMENT CORP., LIONS GATE ENTERTAINMENT INC.,

MARK H. RACHESKY, MHR FUND MANAGEMENT LLC,

MHR INSTITUTIONAL PARTNERS III LP AND

KORNITZER CAPITAL MANAGEMENT INC.

Respondents

___________________________________________

PROCEEDINGS IN CHAMBERS

___________________________________________

Appearing for the Petitioners: R.S. Anderson, QC

T.M. Tomchak

Appearing for the Respondents Lions Gate: M.D. Andrews, QC

J. Francis

Appearing for the Respondents MHR and Rachesky: S.R. Schachter, QC

Appearing for the Respondent Kornitzer Capital: J.K. McEwan, QC

Pauline S. Cziraky / Charest Reporting

Vancouver Office: #1650 – 885 W. Georgia Street, Vancouver, B.C. V6C 3E8

Phone: 604-669-6449 Fax: 604 629-2377

charestreporting@telus.net

Victoria Office: # # 912-1175 Douglas Street, Victoria, B.C. V8W 2E2

Phone: 250-382-3468 Fax: 250-382-3457

charestreportingvictoria@shaw.ca

PROCEEDINGS IN CHAMBERS

NOVEMBER 4, 2010

PROCEEDINGS

Witness Description Page

Submissions by Mr. Anderson

Submissions by Mr. Andrews

Submissions by Mr. Anderson (reply)

Submissions by Mr. Andrews (reply)

Submissions by Mr. Anderson (reply)

Submissions by Mr. Andrews (reply)

Reporter’s certification

EXHIBITS

No. Description Page

No exhibits entered during this day

Submissions by Mr. Anderson

November 4, 2010

Vancouver, B.C.

(PROCEEDINGS COMMENCED)

THE CLERK: Calling the fifth matter on the list, the

Icahn Partners Ltd. and Lions Gate Entertainment

Corp., My Lord.

MR. ANDERSON: My Lord, Robert Anderson, and with me is

Ms. Teresa Tomchak. And we appear on behalf of

the applicants today and the appellants on the

appeal.

MR. ANDREWS: My Lord, Mark Andrews and Jennifer

Francis and we appear for the respondents, Lions

Gate.

THE COURT: Thank you.

MR. SCHACHTER: My Lord, Stephen Schachter. I appear

for Rachesky and the MHR respondents.

THE COURT: Thank you.

MR. McEWAN: My Lord, Ken McEwan, M-c-E-w-a-n, and I

appear this afternoon for the respondent Kornitzer

Capital Management.

THE COURT: Thank you. How long do you expect this to

take?

MR. ANDERSON: I am hoping it will be half an hour,

My Lord.

THE COURT: All right. I have got other litigants

waiting, two sets of them for reasons later, so I

don't want to be -- if it's going to take more

than half an hour it will have to go until

tomorrow.

MR. ANDERSON: I am optimistic we can do it quickly.

And I am about to hand up something that's going

to make it look to Your Lordship that it won't,

but I'm not going through it, if I might.

MR. ANDREWS: I should say that I am a bit dubious as

to whether this gets done in half an hour, in

fairness to the court.

THE COURT: Well, I am giving judgment in two matters

at 3:30. Let's get started. We'll stop in half

an hour, and you might have to wait until quarter

to four.

MR. ANDERSON: Thank you, My Lord.

My Lord, this is an appeal from an oppression

petition that was heard before Justice Savage in

October. His Lordship granted -- set out his

reasons and dismissed the petition on Monday of

Submissions by Mr. Anderson

this week.

The issue that -- the nub of the issue that I

am going to ask Your Lordship to resolve today is

this: should the court schedule the appeal

hearing of this matter at a time when there's a

reasonable opportunity for the decision to come

down at least two weeks prior to the AGM.

Now, there are two ways of getting there, but

if you will, it's really a scheduling issue and

that's the factual question.

If I can just take you to the statement of

facts, and I'm going to go quickly through them.

In July 20th there was a transaction, or series of

transactions, which resulted in a Mr. Rachesky, or

companies controlled by him, having an additional

16 million common shares in his control. The

result of that is the directors and management

increased significantly their shareholdings

through Mr. Rachesky's shareholdings and everybody

else was diluted.

The oppression proceeding was to set aside

those proceedings, My Lord, or alternatively to

other relief that would prevent Mr. Rachesky from

voting his shares at the upcoming AGM. There were

a series of injunctions in place; one by

Justice Sewell on the 6th -- and I am at

paragraph 4 -- one by Justice Savage at the

beginning -- I'm sorry, at the end of its hearing.

Both related to enjoining Lions Gate from setting

the record date. And the record date, My Lord, is

the date on which everybody, as of that date, can

vote. You have to set a date so that there's a ––

I'm not interested in addressing the date of the

record date but the AGM date itself today. But

Your Lordship should be alive to the proposition

that those were -- injunctions were issued.

Paragraph 6. For a considerable period of

time prior to the July 20th transactions a -- and

"dilution transactions" is simply what I called

those -- the 16 million. They're complicated, but

for Your Lordship's purposes Mr. Rachesky ended up

with 16 million more shares from debt and

everybody else was diluted.

THE COURT: Is that a loaded word your friends don't

agree with?

MR. ANDERSON: Yes.

THE COURT: Or is it a proper way to paraphrase it?

Submissions by Mr. Anderson

MR. ANDERSON: No, no, no. The respondents say it was

indeed a dilution transaction, and one of their

reasons for doing so was to dilute Mr. Icahn.

They just say it wasn't their primary purpose.

No, it's not controversial. Indeed they applaud

it.

MR. ANDREWS: I should say it is loaded, My Lord, and I

would not agree with that characterization.

THE COURT: Okay.

MR. ANDERSON: There is no issue --

THE COURT: Now my mind is a bit confused, but that's

all right.

MR. ANDERSON: There is no issue that it did have the

effect of diluting Mr. Icahn, and I think my

friend -- well, I will let my friend speak for

himself when it's his turn.

Paragraph 6. For a considerable period of

time prior to those transactions, My Lord, the

appellants had expressed their considerable

displeasure with the board and the directors and

they publicly indicated they sought a proxy battle

at the upcoming [indiscernible] AGM, and if

successful they would oust the board in the AGM.

Roughly -- and these are prior to -- today

the appellants own approximately 33 percent of the

common shares and Mr. Rachesky 29. Prior it was

38 and 19. Those are not to the penny, My Lord.

Given the other shareholdings controlled by

or in friendly hands of management, it would be

very difficult for the appellants today to win a

proxy battle.

Paragraph 8, My Lord. Unless the hearing of

the AGM is extended, the law requires that it be

heard -- it's set on or before December 15th. You

have to set it within an 18-month window. But

court

SecProbe.io