NEW YORK, April 21, 2006 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all who purchased debt securities of Fairfax Financial Holdings, Ltd. (NYSE:FFH) ("Fairfax" or the "Company") between March 24, 2004 and March 21, 2006, inclusive (the "Class Period"). The Complaint alleges violations of both the Securities Exchange Act of 1934 and the Securities Act of 1933.
The debt securities at issue in this Complaint are:
7.75% notes maturing 04/26/12 ("7.75% Notes");
8.25% notes maturing 10/01/15;
6.875% notes maturing 4/15/08;
8.3% notes maturing 4/15/26; and
7.375% notes maturing 4/15/18
Fairfax, through its subsidiaries, engages in property and casualty insurance and reinsurance conducted on a direct basis principally in Canada, the United States, and the United Kingdom. It also provides claims adjusting, appraisal, and loss management services.
The Complaint also alleges claims on behalf of a sub-class of Class members who also suffered damages upon purchasing the 7.75% Notes pursuant to or traceable to the Company's August 24, 2004 prospectus ("Prospectus") filed by Fairfax with the SEC on August 25, 2004 to effectuate a $95 million aggregate principal amount debt flotation (the "Sub-Class").
The Complaint alleges that statements in the Prospectus omitted material information including, inter alia, (1) failure to detail the Company's increasing liquidity problems; (2) failure to detail second quarter 2004 transactions between Odyssey and Fairfax and to explain that the arrangements were structured to avoid a liquidity squeeze at Fairfax that would have occurred during the quarter; (3) failure to detail Fairfax's exposure stemming from the need to collateralize run-off business; (4) failure to detail the Company's reserves and whether they were adequate to address the Company's growing run-off operations; (5) failure to detail the Company's growing exposure to finite reinsurance agreements within the overall organization; and (6) failure to detail Fairfax's highly leveraged balance sheet and further omissions concerning the Company's equity position. The claims brought with respect to the Prospectus seek to pursue remedies under the Securities Act of 1933 (the "Securities Act") 15 U.S.C. sections 77k and 77l. Defendants, with respect to the claims brought under the Securities Act are Mr. Watsa, the Company, and Trevor Ambridge, the Company's CFO and Vice President (Principal Financial Officer), M. Jane Williamson, the Company's Vice President (Principal Accounting Officer), Anthony F. Griffiths, a Director of the Company, Robert Hartog, a Director of the Company, Bradley P. Martin, Vice President and Corporate Secretary to the Company, and Banc of America Securities LLC, the underwriter of the Company's 7.75% Notes.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. If you purchased or otherwise acquired Fairfax securities on any world exchange between March 24, 2004 and March 21, 2006 and sustained damages, you may, no later than June 12, 2006, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Bradley P. Dyer of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.