Icahn: Warner Bros.' Firing of Lieberfarb a Mistake11 Oct, 2005 By: Erik Gruenwedel
Corporate raider Carl Icahn today, in an open letter to Time Warner shareholders, cited the unexpected Dec. 11, 2002, termination of former Warner Home Video president Warren Lieberfarb as one of the board missteps that adversely affected the company's stock.
Lieberfarb, widely heralded as the “father of DVD,” has an ongoing $30 million wrongful termination case against the studio, seeking full payment of a five-year, 2000 employment contract with Warner Home Video. The suit seeks monetary damages that include $4.3 million in unpaid salary, bonuses and consulting fees; $450,000 for an office and secretary through 2008; $375,000 in unfulfilled financial advisory services; $150,000 for a promised private screening room; a $45,000 car allowance; $36,700 in executive medical coverage; and a $25 million DVD cash bonus.
Icahn referred to Time Warner's “disastrous” 2000 merger with AOL — including an $87 billion write-off after two years — as the board's pre-eminent failure. But he cited media analyst Tom Wolzien's criticism that the resignation of Ted Turner (co-founder of CNN) in 2003 and Lieberfarb's dismissal resulted in a fundamental shift “to the bland by a company that now has no place for genius or contrary points of view.”
The suit claims 250,000 shares of AOL Time Warner stock (in lieu of a cash bonus), once valued at $56 per share and part of Lieberfarb's employment contract, were rendered worthless in 2002 when the stock fell to $8.06 per share following a sharp decline in AOL's perceived value and its restatement of about $477 million in revenue and earnings.
Lawyers representing WHV and Lieberfarb were not immediately available for comment.