Icahn Keeping the Heat on Motorola

Billionaire investor Carl Icahn fired another shot at Motorola's (MOT Quote) directors Monday as part of his continued proxy battle against the incumbent leadership.

Icahn and his affiliates have filed a lawsuit asking a Delaware Chancery Court to order Motorola to turn over materials that he believes will show that the existing board members "failed in their duties as directors in supervising management and setting policy and direction of Motorola."

Specifically, Icahn is seeking documents related to the potential spin-off or sale of Motorola's handset unit, as well as records relating to use of the company's aircraft. Shares of Motorola were lately up 36 cents, or 3.9%, to $9.61, but are down 40% so far this year.

"Over the past 12 months the statements and predictions of Motorola's management and the Board about the Mobile Devices business have too often proven to be wrong," Icahn said in a statement. "We want to ascertain what the Board could have done in the exercise of its fiduciary duty to assure Motorola stockholders that Motorola's statements and predictions were not incorrect and would not provide Motorola stockholders with an inaccurate perspective on the prospects for the Mobile Devices business."

In an attached letter to fellow stockholders, Icahn calls for the election of Frank Biondi Jr., William R. Hambrecht, Lionel C. Kimerling and Keith Meister to Motorola's board.

"As we all are painfully aware, over the past 18 months, the market value of Motorola has dropped by over $37 billion," he wrote. "More than $17 per share of stockholder capital has vanished under the 'guidance' and 'leadership' of the current Board. It is essential to the future of Motorola that its directors realize that the Board, especially at this precarious time, is not a country club or a fraternity."

Icahn added that he is convinced Motorola stockholders need to elect all four candidates he presented "to send a message to Motorola's management and remaining directors that the 'status quo' at Motorola and inside its boardroom is no longer acceptable."

Earlier this month, Icahn disclosed that he upped his stake in the mobile phone company to 142.36 million shares, or 6.3%, up from 5% previously.

All of this comes at a time of upheaval for Motorola. Late last year, Greg Brown took over as chief executive, replacing Ed Zander, who had fallen out of favor with Icahn and other shareholders, as earnings continued to disappoint.

Additionally, the company is now looking at the possibility of splintering off its handset business, which has seen its market share eroded by rivals Nokia (NOK Quote) and Samsung.