Wednesday, 31 August 2016
Last updated 2 hours ago
Sep 13 2012 | 7:55am ET
A Canadian insurer's six-year long battle with a group of hedge funds came to an ignominious end yesterday when a judge threw out what was left of its case.
A New Jersey state court judge dismissed Fairfax Financial Holdings' remaining claims, against hedge fund Exis Capital and brokerage Morgan Keegan. The two were the only remaining defendants from a roster that once boasted eight hedge funds, including SAC Capital Advisors, Third Point and Kynikos Associates.
Fairfax had accused the hedge funds and Morgan Keegan of conspiring to drive down its share price in an $8 billion racketeering lawsuit. Judge Donald Coburn, who had already dismissed some of Fairfax claims on Tuesday, found that there "was evidence of intent to adversely affect the actual business dealings" of Fairfax. But he also ruled that the insurer wasn't entitled to any damages as a result under New Jersey law, calling Fairfax's damage claims "speculative" and "unreliable."
Michael Bowe, a lawyer for Fairfax, said the insurer would appeal.
"We strongly disagree with the decision that the massive damage caused by that indisputable and intentional conduct is not recoverable," Bowe said.
"Today's ruling is in keeping with what we have said since day one: Our company plays by the rules and this lawsuit should never have been filed in the first place," Exis' Adam Sender said. "Our plan is to move forward and work to reestablish Exis Capital as one of the leading hedge funds in the world."
Coburn also dismissed the claims against Sender and Exis chief operating officer Andrew Heller.
Separately, the judge signed off on a consent agreement between Fairfax and Spyro Contogouris, an analyst the insurer claims was hired by the hedge funds as part of their alleged scheme. The judgment makes Contogouris and his firm liable to Fairfax and forbids him from having any contact with Fairfax executives.