METAIRIE, La., July 29, 2008 (PRIME NEWSWIRE) -- The Law Offices of Eric J. O'Bell, LLC ("O'Bell") announce that it has updated its investigation into KKR Financial Holdings LLC ("KKR Financial" or the "Company") (NYSE:KFN) to include an inquiry into why Kohlberg Kravis Roberts & Co ("KKR") has decided to use KKR Private Equity Investors LP (KPE), its failing Amsterdam listed spin-off, to gain listing in the U.S. as a new public company, and whether possible Securities Act violations occurred in connection with the May 4, 2007 Merger & Reorganization (the "Merger" or the "Reorganization"), whereby shareholders voted in favor of receiving, and later received, shares of common stock in KKR Financial, in exchange for the shares that they held previously in the Company's successor, KKR Financial Corp., a real estate investment trust (or "REIT").
In addition to inquiring why KPE was chosen to receive a 50% premium over its trading price to serve as the vehicle by which KKR now hopes to become a U.S. listed, publicly traded company, the continuing investigation focuses on claims made in the Merger Prospectus issued at the time of the Reorganization, regarding the Company's ability to generate sufficient cash flow from net interest margins to service its residential mortgage debt. Only months after this Reorganization, KKR Financial revealed that it would be forced to liquidate the vast majority of its $10 billion residential mortgage asset portfolio -- its most significant cash flow producing asset, as a direct result of its inability to service such debt.
Following this belated disclosure, in early August 2007, shares of the Company declined over 50%.
If you are a KKR Financial shareholder and/or have information that would assist in this ongoing investigation, or have other questions relating to a loss you've suffered in your investment, you may contact Eric J. O'Bell directly without obligation or cost to you at 504-456-8677; or by email to ejo@obelllawfirm.com.