Carl Icahn, the famous "gangsta"-style activist investor, has stepped into the middle of Dell's $24.4 billion leveraged buy-out, threatening "years of litigation" if he doesn't get his way.

He has apparently amassed a 6% position in Dell, making him the company's second-largest outside stockholder, and he wants a $9-a-share special dividend paid out instead of letting Dell founder Michael Dell take the company private.

In a letter to Dell's board Thursday Icahn proposed that the dividend be paid if shareholders voted down the LBO and wants the vote combined with the company annual stockholders meeting so stockholders also vote on the board.

If they don't do that - that's where he's promising "years of litigation" challenging the LBO.

He claims his dividend scheme is superior to the current $13.65-per-share offer price although CNBC cast a question mark over Icahn's $9 arithmetic.

He is also obviously threatening to mount a proxy fight to unseat Dell's current board and implement a leveraged recapitalization and the dividend proposal, which would require new debt.

He said that if his slate of directors is elected Icahn Enterprises would provide a $2 billion bridge loan and he would personally provide a $3.25 billion bridge loan if needed - on commercial terms of course.

The special committee of the Dell board said Wednesday that it had unanimously decided after five months of consideration that the LBO was the best course for stockholders and had "negotiated aggressively" to get the best price. It said it considered breaking up the company, a leveraged recapitalization, a change to the dividend or doing nothing.

In response to Icahn it said it was still looking for a better alternative through a "robust" go-shop process that had the bankers at Evercore actively soliciting alternative proposals.

The go-shop period ends March 22 and the board welcomed Icahn's help finding an alternative. Reportedly Lenovo and HP aren't interested. And Blackstone, the private equity house, is apparently ambivalent about getting involved.

Dell's largest independent shareholder with an 8.4% position is Southeastern Asset Management, which is violently opposed to the LBO because the price is too low and it will lose money. It has also suggested a leveraged recapitalization and is hankering after a $12-a-share dividend.

Earlier this week it accused Dell of withholding information from stockholders. It wants a list of stockholders. It thinks Dell is worth around $24 a share.

T. Rowe Price, another large stockholder, is also opposed to the LBO.

Michael needs 42% of stock held by outsiders to back him. Abstentions count as "no." His opposition counting Icahn currently stands at around 21%.

Dell's shares are over Michael's price at around $4.20-$4.25.