Dan Loeb sent subpoenas to a crew of reporters in February over a bitter legal battle he’s having with Canadian insurer Fairfax Financial, which has accused Third Point and various other hedge funds of betting against its shares, Reuters reports.The insurance company thinks Loeb, Jim Chanos and Steve Cohen all “spread disinformation… to a number of business journalists,” as part of an “organised a campaign to drive down the prices of Fairfax’s shares” because they were shorting the stock.
The battle is now in its fifth year, and also involves Exis Capital.
Fairfax filed suit in 2006, and wants $6 billion in damages, alleging the hedge funds harassed the firm’s CEO, intimidated executives and sent out slanderous research reports to their investors, all of which “depressed [Fairfax] credit ratings, diminished its ability to make acquisitions, and reduced the amount it could raise in debt and equity offering,” according to Businessweek.
Loeb denies the allegations, and we assume the reason he subpoenaed journalists was an attempt to prove that he had not spread information to them.
Reuters reported that journalists that received a summons include: Joe Nocera of the New York Times; ex-Fortune writer Bethany McLean; and perhaps Peter Eavis, formerly of the Wall Street Journal.
But apparently, very suddenly, Loeb backpedalled and no longer wants documents from the journalists, or their testimony. According to Reuters, several reporters who were served with the summonses had already enlisted lawyers to fight the request.
And just because Loeb has suddenly changed tune, doesn’t mean the reporters won’t have to testify. Apparently another defendant (ie. hedge fund manager) in the case still wants to take a deposition from one of the journalists. And lawyers for Fairfax might demand testimony from Roddy Boyd, a journalist accused by the insurer of penning a series of unfavorable articles for the New York Post after “receiving information” from employees at the hedge funds.