Investor owns 37 percent of the mini-major

Lionsgate has named investor Mark Rachesky — who owns 37% of the mini-major — as co-chairman of the board in the wake of settling its bitter dispute with Carl Icahn.

Rachesky, a one-time Icahn associate, consistently backed the management of Lionsgate during its bitter three-year battle with the billionaire investor.

The Lionsgate board voted Tuesday to replace Harald Ludwig with Rachesky in the co-chairman post, a title shared with CEO Jon Feltheimer. Rachesky’s appointment was disclosed in a regulatory filing Thursday with the Securities and Exchange Commison.

A spokesman for Lionsgate had no comment. Rachesky also holds non-executive chairmanships at two other companies.

Rachesky, who was named to the 12-member Lionsgate board in 2009, agreed two weeks ago to boost his stake in the company as part of an Aug. 30 settlement in which Icahn agreed to sell his 33% stake and end a series of disputes with the mini-major. Rachesky, president of MHR Fund Management, paid $77 million to buy a quarter of Icahn’s stock at $7 a share as part of the settlement.

Lionsgate tapped Rachesky for the board two years ago as part of its slate after Icahn had been rebuffed in efforts to gain seats on the panel. At that point, Rachesky owned 19.8% of Lionsgate and replaced Mark Amin on the board.

In July, 2010, Rachesky was at the center of what became a key dispute with Icahn in a $100 million debt-for-equity deal as Icahn was attempting to take over the company via a series of hostile tender offers. The transaction reduced Icahn’s stake from 37% to 33% and boosted Rachesky’s holdings to 29%.

The Rachesky deal provoked legal action by Icahn, who alleged that the minimajor’s management and board was underhanded and unprofessional while Lionsgate repeatedly portrayed Icahn as a meddler with a poor track record of investing in entertainment companies.

The battle with Icahn began ebbing last December when Lionsgate successfully withstood a spirited proxy battle with Icahn. The Aug. 30 accord allowed Icahn to break even by selling his 33% stake in the company at $7 a share in a series of deals totaling about $309 million. Under that surprise pact with Icahn, the two sides agreed to dismiss all outstanding litigation between them — bringing to a close a tumultuous three-year period that saw Icahn accuse Lionsgate management repeatedly of overspending and failing to boost the stock price to anywhere near its 2007 high of $12.

On Tuesday, Lionsgate held a brief annual meeting in Toronto, which Rachesky did not attend. Feltheimer accentuated the positive, taking the 40 or so attendees through what he called Lionsgate’s “end-to-end solution” for “Weeds.”

Lionsgate announced Thursday that it had wrapped production in North Carolina on what it hopes will be a B.O. franchise based on the “Hunger Games” book trilogy.

Lionsgate shares were up 12 cents to $7.08 Thursday.

Rachesky is co-founder and president of MHR Fund Management, which has been a major Lionsgate shareholder for more than five years. He worked as an Icahn strategist from 1990 to 1996.

Rachesky currently serves as non-executive chairman of the board of directors of Loral Space & Communications and Leap Wireless International Inc. He’s on the board of directors of Emisphere Technologies.

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