Aerojet Rocketdyne Boardroom War Kills $4.4B Deal With Lockheed

Tensions between Aerojet Rocketdyne’s leadership have now escalated into a full-blown legal battle over the future of the company, with its chief executive and her allies on the board seeking to unseat the firm’s executive chairman as a countermove to what they describe as a “boardroom coup,” Valerie Insinna reported for Breaking Defense.

Photo Insert: The battle lines have been drawn between Aerojet CEO Eileen Drake and its executive chairman Warren Lichtenstein

The battle lines have been drawn between Aerojet CEO Eileen Drake and its executive chairman Warren Lichtenstein, whose Steel Partners Holdings LP owns 4.9% of the company. Both have three allies on the eight-person board of directors, leaving it in deadlock, and have filed lawsuits against the competing faction.

At stake is the future of Aerojet Rocketdyne — a company the government has deemed essential to America’s defense industrial base due to its status as the only remaining independent solid rocket motor manufacturer and, in some cases, the sole supplier for key components for missiles, rockets, and hypersonic weapons. This story is based on legal filings viewed by Breaking Defense.

During a hearing, a judge from Delaware Chancery Court stated her intention to approve a Feb. 7 request from Lichtenstein for a temporary restraining order (TRO) against Drake and her cohort — Kevin Chilton, Thomas Corcoran, and Lance Lord — effectively barring them from being able to speak on behalf of Aerojet or use its resources in an upcoming board election, which will decide the direction of the company.

The complaint alleges that Lichtenstein and his allies violated their fiduciary duties by launching a proxy contest while Aerojet’s now-defunct $4.4-billion merger with Lockheed Martin was pending and circumventing company governance procedures.

Ultimately, Drake seeks a court order to remove Lichtenstein from his position as a director of Aerojet and the appointment of a “special committee” of Chilton, Lord and Corcoran, her three supporters, to break the deadlock on the board and manage the company’s response to the proxy contest.

“Half of an evenly divided board may not speak on behalf of the Company or use its resources to discredit the other half in an election contest,” Lichtenstein’s complaint states. “None of the directors should be tapping the corporate treasury in an effort to tilt the stockholder vote in their favor.”

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