As Carl Icahn pushes for board seats at Genzyme Corp. and Lions Gate Entertainment Corp., there is long-simmering agitation within two of his companies.

The antagonist is Q Investments LP, a Fort Worth hedge fund started by a veteran of Goldman, Sachs & Co. and Bass Brothers named Geoffrey Raynor. Through lawsuits, letters to directors and Securities and Exchange Commission filings over the past several years, Q has railed against the governance of Federal-Mogul Corp. and XO Holdings Inc., both of which the New York investor chairs.

The mud flies in both directions. Q Investments portrays Icahn as an entrenched majority owner who uses control of his companies to cudgel minority investors, the antithesis of the shareholder champion. In its latest suit, lodged in January against Icahn Enterprises LP, the firm accuses Icahn of failing to disclose litigation over Federal-Mogul stock during a bond offering. Previously, it accused the investor of looting XO.

Icahn volleys back that Raynor is a secretive, litigious investor who uses accusations and lawsuits to manufacture nuisance value and paper over poor investments. Pleadings call the series of Federal-Mogul lawsuits "chronic and totally unjustifiable attempts to extract money from [Icahn] to recoup the losses suffered from [Q's] investments in XO."

Icahn has answered Q's lawsuits with one of his own, seeking $100 million in damages for alleged sabotage of a $2 billion bond offering by Icahn Enterprises.

Both sides have declined to comment but have left a lengthy paper trail. To Q, the litigation addresses a pattern of manipulation. Icahn views Q's suits themselves as a form of extortion.

Sorting right from wrong in the litigation over XO and Federal-Mogul will fall to judges in the New York County Supreme Court. Regardless of who prevails, the lawsuits open a window into the tactics of two aggressive investors who eagerly wade through bankruptcy court and proxy contests, and who have a knack for showing up in prominent Wall Street deals and corporate board disputes.

Icahn is famous for rattling cages at Time Warner Inc., Motorola Inc., ImClone Systems Inc., Blockbuster Inc. and a host of others. Over the decades, he has put his stamp on companies such as RJR Nabisco, Texaco, Marvel Comics and Viacom Inc., to name a few.

Raynor has less name recognition but is no slouch. He left Bass Brothers to found Q in 1994. Beyond Q's involvement at Federal-Mogul and XO, in recent months Q has sued Providence Equity Partners LLC portfolio company Newport Television LLC over an alleged default by the TV station group and said in filings that it is willing to buy shares and votes to block Apollo Global Management LLC's $635 million purchase of theme park operator Cedar Fair LP. The firm held Charter Communications Inc. bond and bank debt and was among the vocal opposition to the cable operator's reorganization plan.

Q Investments goes by varied names such as Amalgamated Gadget LP, R2 Investments LDC, Scepter Holdings Inc. and Renegade Swish LLC. In Cedar Fair it has taken a literary turn, investing through entities called Prufrock Onshore LP and J Alfred Onshore LLC. The names refer to T.S. Eliot's 1917 poem "The Love Song of J. Alfred Prufrock." Raynor's political action committee is, appropriately, Q Funding.

It's not exactly David versus Goliath. Q's Web site says it is a "multi-billion dollar fund." Icahn accuses Raynor of being a "serial suer," having lodged more than 45 lawsuits in the past five years.

In happier times, Icahn and Raynor were actually partners. Both had accumulated debt in bankrupt auto parts maker Federal-Mogul. Raynor approached Icahn about pooling their debts within a vehicle called 1879 Hall LLC to boost their influence in the case.

Either partner could purchase a share in any new debt that the other acquired. Originally, Icahn could purchase up to 78% of any new Q bonds, and Q up to 22% of any instruments that Icahn acquired. Q's ratio later fell to 11%.

Q Investments also put money in Icahn's Reston, Va., business telecom XO Communications LLC.

Asbestos litigation slowed the Federal-Mogul reorganization. Icahn bought out Raynor's notes in 2005. The company, which filed for Chapter 11 protection in 2001, did not emerge until late 2007.

While Federal-Mogul's reorganization dragged on, tension surfaced in XO. Despite its name, the history of XO is not a story of hugs and kisses. It was one of Teddy Forstmann's telecom busts. Icahn gained control through the bankruptcy courts by acquiring debt.

The telecom exited bankruptcy protection in January 2003, with Icahn as chairman. Because he held more than 80% of XO, one of Icahn's holding companies could apply net operating losses to tax bills of profitable companies. Icahn at one point held approximately 90% of XO's debt.

The transfer of net operating losses is one of the points of contention. A 2008 agreement requires that Icahn pay 30 cents on the dollar for tax savings on the first $900 million of XO's NOLs but make no payment on the rest of the tax losses. If XO turned a profit, which it has never done, Icahn would pay 100 cents on the dollar. The original agreement, from XO's bankruptcy, would not have involved any payments. While Icahn benefits, the new tax deal provides XO with $90 million to $100 million it would not otherwise have received.

Q calls the agreement "blatant looting" in pleadings. The firm, which received a court order to have XO turn over books and records, says that the financial adviser for a special committee to XO's board declined to deliver an opinion on the fairness of the NOLs.

When Icahn attempted to take XO's wireline telecom business private for $700 million in 2005, Q and others sued to block the deal. Following a 2006 preliminary hearing in Delaware, Icahn withdrew the proposal. Icahn and Q later battled over proxy language that would have made it easier for Icahn to acquire the unit.

Q's pleadings state that three bidders approached XO in 2008. A $1 billion offer to buy the entire company would have paid $2.25 per share, versus the price of $1.27 per share at the time. Another party offered $900 million to $1 billion for the wireline business. The party deferred a bid because there was not a clear sale process, Q's pleadings state.

Delaware law gives discretion to a board's judgment when reviewing takeover offers. Q argues that the board breached its duties to minority shareholders by declining to solicit bids or set a timeline for an auction and opting for an offering that allowed Icahn to increase his holdings.

Icahn made another bid to purchase the company in 2009, initially offering 55 cents per share.

In a letter to the board, Q Investments predicted how the negotiations would proceed. "For a moment, please humor us as we predict how the next few weeks will play out," the letter states. XO's independent directors would push for a higher price. Icahn would increase the bid to 75 cents per share, and win approval. "The 'independent' directors will trumpet their accomplishment and tout that they were able to increase Mr. Icahn's offer by over 35%."

The firm was close, but the prediction was wrong in one important aspect. A special committee to XO's board rejected the 55 cent per share offer, and Icahn responded with an offer of 80 cents per share. Icahn terminated the offer after he did not receive a counteroffer from the board.

Q launched its latest lawsuit in January. The timing of the suit against Icahn Enterprises, more than the content, has riled Icahn.

The complaint came as Icahn Enterprises was preparing to offer $2 billion in notes. The company hoped to be the first issuer of 2010 to cash in on a bustling market. On Jan. 11, as Icahn and his bankers were pricing the notes, Q announced through an SEC filing that it had launched a new suit. "It has come to the attention of the Reporting Persons that Icahn Enterprises, LP may be materially misrepresenting the nature of its ownership of certain assets in connection with its recently announced $2 billion Senior Note sale," the filing states. Q attached a copy of the lawsuit.

On its surface, Q's request is simple. It wants disclosure that it might have a claim on 6 million of Icahn's Federal-Mogul shares.

To Icahn, the filing and the lawsuit represent much more than the request for a footnote in an 8-K. By issuing the suit as Icahn was pricing the bonds, Icahn says that Q intentionally spooked the market. Icahn puts the damages for higher interest payments and other costs at $100 million.

Icahn responded in February with his first suit against Raynor and Q. He calls Q's latest suit a hoax by which the firm hopes to "continue to bedevil Icahn to force Icahn to acquire [at a profit to Raynor] Raynor's losing investment in XO stock" in pleadings.

The complaint claims that Q's Federal-Mogul suit is not of material size for a company like Icahn Enterprises. The New York holding company has a market cap of $3.5 billion and $5 billion in assets under management. Because Q initially sued for damages, not the right to purchase Federal-Mogul stock, Icahn argues that the firm would receive cash, not stock, if it prevailed. There would be no reason to disclose that some of the Federal-Mogul shares could be at risk.

Moreover, the exercise price of the rights offering would have allowed Q to buy about 6 million shares at $17.96 each. For most of Federal-Mogul's existence after bankruptcy, the shares have traded below that level. The stock initially traded over the counter at $26.05 in January 2008 and later moved to the Nasdaq. During most of 2009, it traded in the single digits or low teens. In late February and early March, the stock traded in the $18 to $20 range.

By and large, however, Q's options have been under water.

"If Raynor wanted to acquire FMO stock, he could have bought it cheaper in the market than under the options," Icahn's pleadings state.

However sour their relationship has turned, Icahn and Q are stuck with each other. A ruling or a settlement could bring the Federal-Mogul dispute to a conclusion. XO could be a longer-term marriage. Icahn still holds a dominant position, and Q is still a minority shareholder. There is a wealth of NOLs that could serve as fodder for future lawsuits.

At the moment, there may be only one certain conclusion. Icahn and Q have found worthy adversaries.