The saga surrounding the proposal to take Dell, Inc. private continues to unfold, as the main parties hit out at each other in the last few days. Famed investor Carl Icahn recently filed suit against Dell’s Board of Directors in Delaware. Icahn blasted the Board, saying they are using “self-granted imperial status” in moving the dates of key votes and changing important voting rules. Michael Dell responded by saying Icahn was using the litigation as a soapbox for his public dispute with the Board of Directors.

Icahn’s suit seeks to prevent Dell’s Board of Directors from moving back a shareholder vote for the proposal to take Dell private. Michael Dell and Silverlake, a private equity firm, upped their bid for Dell shares by $.10 to $13.75 last week, for a total price of around $24.9 billion. The revised deal contains an additional special dividend of $0.13 per share. In exchange for the increased offer, the Board agreed to move the scheduled shareholder vote to Mid-September, with the record date for shareholders to vote on the proposal moved to August 10th. The Board of Directors also moved the annual shareholder meeting to October 17th, after the scheduled shareholder vote on the deal.

With the shareholder vote on the proposal scheduled prior to the annual meeting, Dell essentially thwarted Icahn’s attempt to take over the Board. Moving the record date for the vote on the proposal to August 10th allows more recent stock purchasers to participate in the decision. It is believed that merger arbitrage investors have bought shares recently on the belief the deal would be approved. These investors would therefore have a financial impetus to vote in favor of the proposal.

The Icahn lawsuit also seeks to prevent the Board from altering the voting rules for the shareholder meeting. The new proposal from Michael Dell and Silverlake contained a provision that in exchange for the increased offering price, the rules governing how votes are counted would be modified. Right now, absent ballots are tallied as no votes. Under the revised rules, absent ballots would not be counted in the tally. Only a majority of cast ballots would be needed to approve the deal. Sources close to the parties involved believed the vote on the proposal would not be successful if absentee ballots were counted as no votes.

Icahn had been orchestrating a takeover of the Board. By working with Mason Hawkins of Southeastern Asset Management, Icahn was seeking to elect a friendly slate of directors. As of May, Southeastern owned over 146 million shares in Dell. Icahn bought another 4 million shares of last week, for a total of 156.5 million shares. This represents an 8.9% ownership interest in the Company, worth around $2.4 billion. Icahn is pushing his alternative plan of a leverage buyout, using debt to repurchase a portion of the outstanding shares. Icahn’s plan would leave a portion of the shares publicly traded.

The price action in Dell’s shares continues to be dictated by news on the status of the deal. The price popped around 5% on August 2nd on news of the sweetened offer. Since then, the price has remained remarkably flat, around $13.74, hugging its 50-day SMA. The market is unlikely to move the price in either direction unless influenced by some sign as to the status of the privatization proposal. The short interest appears to be holding steady, with no major increases in the short ratio. As of July 15th, there were 23.3 million shares being shorted. The stock is up 36.83% year to date. It hit a 52-week high of $14.64 in late March, with a 52-week low of $8.69 in mid November, 2012. Dell is forecasting revenues of $56.94 billion in 2013, versus revenues of $62 billion in 2012.

Icahn’s legal challenge in the Delaware court could determine the fate of Dell. While it is unlikely the market will move the price higher than that offered in Michael Dell and Silverlake’s proposal, an Icahn legal victory would throw enough doubt on Dell’s future to place significant downward pressure on shares. The story is fascinating to follow as Michael Dell and Icahn continue to duke it out over the future of Dell in the markets and in the courts.

Disclosure: The author has no position in DELL, and no plans to initiate any position within the next 72 hours.