Billionaire investor Carl Icahn is dragging Forest Laboratories to court in an attempt to gain full access to its books and fuel a proxy fight for control of the drugmaker.

A complaint filed in the Delaware Chancery Court by Icahn has requested access to documents regarding Forest's succession plans and other governance issues.

It seems a key thorn in Icahn's eye is over who will take over from Forest chairman and chief executive Howard Solomon, 84, who has served on the company's board for 48 years, after he steps down.

In a letter to the company, Icahn reportedly questions whether the lack of a proper succession plan is because Solomon actually intends to hand over the reigns to his son David Solomon, whom he claims is lacking the experience necessary for such a role.

“His only senior level executive experience has come from working for his father – prior to that, David was in the business of making movies,” writes Icahn, according to the New York Times. “Forest Labs is not a dynasty to be despotically handed down from father to son, ignoring the great risk of this action to its shareholders," he said.

Holding just shy of 10% of its stock, 76-year old Icahn is Forest’s second-largest shareholder, but has been at loggerhead's with the firm's leadership since August 2011, when he first tried to change the shape of its board.

In May this year, he also made a filing to the US Securities and Exchange Commission stating his intention to nominate an undisclosed minority slate of candidates to the board of directors, including ex-Merrill Lynch biotechnology analyst Eric Ende. 

Unusual arrangement?

Now, in a further twist to the tale, Reuters has reported that Icahn has an unusual arrangement with Ende that could give Forest extra ammunition for its defence against his tactics.

According to a regulatory filing in May, Icahn has given Ende an incentive to achieve at least $47.50 per share, promising the latter 1% of his profits above this amount if certain conditions are met. 

Under this arrangement, if Icahn were to sell up at $50 apiece, for example, then Ende would receive around $659,000, as Reuters points out, adding that Ende is also getting a fee of $65,000 per month during the proxy contest.

Forest bites back

In response to Icahn's letter, Forest said: "We regret that Mr Icahn has resorted once again to his tired playbook designed for maximum distortion, distraction and litigation rather than engaging constructively with the company".

"Icahn is simply recycling arguments that were rejected last year by the vast majority of Forest shareholders, and has nominated a director slate led by Eric Ende, who received the lowest number of votes of any of the fourteen nominees to Forest's board last year".

And with regards to his comments about succession, "the idea that Forest has been less than forthcoming could not be further from the truth," it said. 

"As previously disclosed, the company is engaged in ongoing succession planning, led by its independent directors," Forest stressed, and noted that Howard Solomon "is one of the most successful CEOs in the industry and it would be both inappropriate and unusual to announce his successor at this time".