Icahn Firm Challenges Small Investor to Lead $25 Billion Endeavor Lawsuit

Carl Icahn's firm and Handelsbanken Fonder AB are vying to lead a proposed class action lawsuit alleging Silver Lake and Endeavor executives breached fiduciary duties by striking an unfair deal in the $25 billion buyout of Endeavor Group Holdings. Icahn's firm has a financial stake of $757 million, while Garcia, the opposing candidate, has a stake of $750. The Delaware Chancery Court will decide which gets to be lead plaintiff.

Carl Icahn's investment firm and Handelsbanken Fonder AB are locked in a battle to lead a proposed class action lawsuit alleging that Silver Lake and Endeavor executives breached their fiduciary duties during the $25 billion buyout of Endeavor Group Holdings Inc. The Delaware Chancery Court will decide which party will serve as the lead plaintiff, a role that comes with significant advantages including the choice of attorneys and greater control over legal strategy [1].

Icahn Enterprises, with a financial stake of approximately $757 million, and Handelsbanken Fonder AB, which owns 99.8% of that stake, have filed a motion to lead the lawsuit. They allege that Silver Lake and Endeavor executives, including Hollywood superagent Ari Emanuel, struck an unfair deal that rewarded insiders with lucrative payouts. However, the opposing candidate is Ricardo Garcia, an individual investor with a stake of approximately $750 in Endeavor, who has also filed a request to lead the class action [1].

The two sides are expected to make their arguments on August 7 before Delaware Chancery Court Judge Lori Will. Attorneys for Icahn and Handelsbanken argue that Garcia should not be named the lead plaintiff due to his small stake. Garcia's attorneys counter that Handelsbanken was also a small shareholder and that Icahn's firm only bought shares after the 2024 deal announcement with the aim of suing, a practice that Delaware courts have frowned upon in the past [1].

The buyout, which closed on March 24, extended Silver Lake's 37% ownership stake by purchasing 100% of the outstanding shares it didn't already own. Endeavor common stockholders were paid the offering price of $27.50 per share in cash. Only weeks prior to the closing, Icahn and other investors piled into the stock during a run-up in value of Endeavor's most important asset, TKO Group Holdings Inc., parent of World Wrestling Entertainment Inc. and Ultimate Fighting Championship [1].

Icahn and Handelsbanken allege that the stock was trading at $29.25 per share when the deal closed and that Silver Lake didn't pay a fair price. Endeavor and Silver Lake declined to comment, while Icahn did not provide a comment. Attorneys for Garcia did not respond to multiple requests for comment. Silver Lake has said the deal price was fair and blamed hedge funds for causing an artificial increase in the stock price. Endeavor said the purchase price represented a 55% premium to where the company's shares were trading before it announced that it was reviewing strategic alternatives in 2023 [1].

The buyout has sparked several legal challenges, with multiple hedge funds asking a court to come up with a fair valuation of the deal. The inquiry into the deal price will focus on how and when to value Endeavor's majority stake in TKO Group Holdings, which trades as a separate public company. The price of TKO jumped by nearly 80% between the signing and closing of the deal [1].

Garcia lodged his suit in June, arguing that his financial stake is more than sufficient to incentivize him to monitor counsel and play a meaningful role in the case. He accused Icahn of opportunistically buying shares to bring the lawsuit, a practice he says that one Delaware court has characterized as "evil." Garcia requested that Labaton Keller Sucharow and Friedman Oster & Tejtel be tapped as co-lead counsel on the case, while Icahn and Handelsbanken have pushed for Bernstein Litowitz Berger & Grossmann and Grant & Eisenhofer [1].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-23/icahn-s-firm-vies-to-lead-suit-over-25-billion-endeavor-buyout