The Boardroom Battle for Control of Aerojet Rocketdyne Is Heating Up

The insider battle for control of El Segundo-based rocket maker and government defense contractor Aerojet Rocketdyne is heating up.

In dueling, incendiary public letters to shareholders this week, Aerojet Rocketdyne executive chairman Warren Lichtenstein and CEO Eileen Drake accused each other of attempting to seize control of the company. Lichtenstein also filed yet another lawsuit against Drake and three Aerojet board members Wednesday, adding another legal case to the acrimonious boardroom battle.

In his letter on Tuesday, Lichtenstein described Drake as a “rogue” executive who he alleged violated the law by lying to investors. Drake defended herself in a separate shareholder letter published Wednesday, in which she called Lichtenstein’s allegations “baseless personal attacks.”

Drake, who was appointed CEO in 2015, is urging Aerojet shareholders to vote to keep her as CEO and approve an entirely new board of directors without Lichtenstein and his allies, while Lichtenstein is proposing his own slate of directors that would see Drake pushed out. Aerojet shareholders are set to have their say on the company's future at a meeting on June 21—though Lichtenstein on Tuesday proposed moving back that meeting to June 27, citing the pending resolution of his previous lawsuit against Drake.

The conflict between Aerojet’s chairman and CEO escalated earlier this year, when a planned $4.4 billion merger with the world’s largest defense contractor, Lockheed Martin, fell through after the Federal Trade Commission sued to block the deal. By February, Lockheed had caved to the FTC’s antitrust pressure and the merger was dead, igniting the conflict in Aerojet’s boardroom.

Lichtenstein and three fellow board directors first sued the company earlier this year, a drama that is now playing out in Delaware’s Court of Chancery with a trial expected in May. Drake and Aerojet then hired an independent counsel to investigate Lichtenstein, and countersued him in a bid to remove the chairman from the board. Aerojet’s lawsuit alleged Lichtenstein of doing the very same deeds he has accused Drake of: plotting to take over the board if the Lockheed merger failed and using his investment firm, major Aerojet shareholder Steel Partners Holdings, as leverage to propose new leadership.

Last week, Aerojet announced its largest-ever contract for its RL10 rocket engine, an order for 116 engines from the United Launch Alliance. The engines could fly on the ULA’s Vulcan Centaur rocket as soon as the end of this year.