Icahn Calls out SandRidge Energy on Ouster of Former CEO

While SandRidge Energy on Monday was busy notifying shareholders of what it labeled Carl Icahn’s poor track record in energy investments,  he too was busy attacking SandRidge’s Board of Directors.

In his efforts to win support of shareholders for election of a new board, Icahn accused the board of overpaying CEO James Bennett when he was removed earlier this year.

In his latest open letter to shareholders, Icahn claimed that when the SandRidge board fired Bennett and CFO Julian Bott in February, it allowed Bennett to “slink away with a king’s ransom in severance.”

“We do not believe the incumbent directors may simply hide behind ‘business judgment’ to explain away this corporate waste but rather should be required to demonstrate how their actions do not constitute gross negligence or a breach of the duties they owe to SandRidge and its stockholders,” he wrote.

To which SandRidge stated in its Monday notice to shareholders, that Icahn’s claim was another myth. It stated that the Board actually found no legal basis to terminate Bennett for cause and had the board withheld severance as Icahn advocated, SandRidge would have been liable under Oklahoma law for unpaid wages and additional,liquidated damages, potentially doubling the amount owed.

The current SandRidge also maintained that it was not involved in the adoption of James Bennett’s legacy employment agreement. Rather the employment agreement was negotiated by the SandRidge’s former board before the company exited bankruptcy in 2016.

“Despite having no involvement in their creation, our Board has been  bound by the legacy employment agreements—assumed under the plan of reorganization and approved by the company’s creditors—that established minimum levels of compensation and severance payments.”

The current board also said that for 2017 it paid only the legally obligated amount as provided under Bennett’s legacy employment agreement. It also paid him no 2017 performance bonus and eliminated other benefits historically provided to department members of management.

“In connection with Bennett’s departure, SandRidge made only the severance payments to which he was entitled under his legacy employment agreement.”