Item 7.01
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Regulation FD Disclosure
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The following information is
furnished under Item 7.01, Regulation FD Disclosure. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or
incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Certain statements contained in this filing, including without limitation, those containing the words believes, intends,
expects, anticipates and words of similar import, may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts and are
based on current expectations, estimates and projections about the Companys industry, managements beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control.
Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to
certain risks, uncertainties and assumptions that are difficult to predict. Since such statements involve risks and uncertainties, the actual results and performance of the Company may turn out to be materially different from the results expressed
or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its
view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this presentation. Readers should carefully review the risks and uncertainties detailed in the Companys
Annual Report on Form 10-K and in other reports or documents the Company files from time to time with the Securities and Exchange Commission, including, without limitation, under such headings as Risk Factors and Certain Factors
Affecting Results of Operations in the Companys Annual Report on Form 10-K for the year-ended December 31, 2006 and in the Companys Quarterly Reports on Form 10-Q and in other reports or documents the Company files from time
to time with the Securities and Exchange Commission. Other risks include those associated with the closing of the Deephaven Event Funds (as defined below).
This information should also be analyzed in conjunction with the Companys Consolidated Financial Statements and the Notes thereto contained in the Companys Annual Report on Form 10-K and in other reports
or documents the Company files from time to time with the Securities and Exchange Commission.
On January 31, 2008, the Companys
asset management subsidiary, Deephaven Capital Management LLC (Deephaven), announced that it has concluded that it is in the best interests of investors in the Deephaven Event Fund LLC and the Deephaven Event Fund Ltd. (collectively, the
Event Funds) that the Event Funds return investors capital. As of January 1, 2008, Deephaven managed approximately $4 billion in assets, of which approximately $780 million was invested in the Event Funds.
The decision to return investors capital in the Event Funds occurred after a review by Deephaven of
the Event Funds and the Event Funds viability given the current macro-economic environment, performance over the past nine months, declining investor interest in event-driven investment strategies and significant levels of redemption requests
in the Event Funds. Substantive changes in macro-economic circumstances in the U.S. have resulted in a reduction in the types of opportunities that Deephaven would ordinarily pursue as components of the Event Funds core event-driven strategy
and the conclusion that the Event Funds core investment strategy is unlikely to produce the type of investment results Deephaven and its investors might expect over the short and intermediate term. As a result, redemptions in the Event Funds
have been suspended with immediate effect, and Deephaven will begin an orderly process to reduce trading positions to cash and return investors capital as promptly as reasonably practicable. Beginning February 1, 2008, and through the
period of time Deephaven is returning investors capital, no management or incentive fee will be charged to investors in the Event Funds.
During the distribution process, Colin Smith, Deephavens Chief Executive Officer and Chief Investment Officer, will be supervising the reduction of the Event Funds positions to cash. In addition, Deephaven and Andrew Greenberg, the
current portfolio manager of the Event Funds, have each agreed that Greenberg will leave the firm. Also, effective immediately, Tony Chedraoui will, in addition to continuing as the portfolio manager for Deephavens European Event portfolios,
take on the additional responsibility of leading the Deephaven global event-driven team and managing its portion of the Deephaven Global Multi-Strategy Fund.
Based on the current aggregate assets under management in the Event Funds and the historical returns of the Event Funds over the last twelve months, the Company believes that the loss of income resulting from the
closing of the Deephaven Event Funds will not have a material adverse effect on the Companys business, financial condition and operating results.