NEW YORK, Aug. 8, 2006 (PRIMEZONE) -- Wechsler Harwood LLP today announced it has filed a class action suit on behalf of all purchasers or acquirers of the following series of notes of Sea Containers Ltd. (NYSE:SCR-A) ("SCL" or the "Company") between March 24, 2003 and June 13, 2006, both dates inclusive (the "Class Period"): 10.5% Senior Notes due 2012; 12.5% Senior Notes due 2009; 10.75% Senior Notes due 2006; and the 7.875% Senior Notes due 2008 (collectively, the "Notes").
The action, entitled Tartikoff v. Sea Containers Ltd, et al., Index No. 06 CV 5655 (SWK), is pending in the United States District Court for the Southern District of New York and names as defendants the Company, James Sherwood (former CEO, President and Chair), Ian C. Durant (CFO), and Daniel J. O'Sullivan (former CFO). A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint alleges that throughout the Class Period SCL disseminated press releases and SEC filings that were materially false and misleading because, among other things: (1) defendants failed to record, in a timely manner, half a billion dollars' worth of impairments to the value of certain assets in SCL's ferry and container business segments; (2) SCL overstated its earnings and exaggerated its profit from the sale of its equity interest in Orient-Express Hotels Ltd. ("OEH"), an unconsolidated company of which SCL owned 42% as of April 2004, which coincided with the registration and issuance of the Company's 10.5% Notes; (3) the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (4) as a result, the value of SCL's net income and financial results were materially overstated at all relevant times.
On March 24, 2006, prior to the market's opening, SCL disclosed it would discontinue its ferry business, record a $500 million impairment of certain assets and restate its 2005 interim financial results. With respect to the $500 million impairment charge, of which $415 million related to assets in the ferry operations division, the Company stated that it would recognize the charge during the fourth quarter of 2005. As of September 30, 2005, the Company reported the value of those assets as more than $1 billion. The Company further disclosed that, as a result of the substantial write-down, it violated debt covenants with certain lenders and would restate its 2005 financial statements. The Company attributed the overstatement to the $10.3 million-gain from the March 2005 sale of a portion of its equity investment in OEH, chalking it up to an accounting error in its foreign currency exchange reserves.
On June 13, 2006, SCL issued a press release announcing that "it may be in default on its bonds." The press release emphasized that the Company "was unsure if it would repay a bond due in October follow(ing) a default by French auto logistics company GAL -- the first European default since February 2005." The rating agencies contemporaneously predicted that "default rates (would) rise from very low levels." On June 13th, upon hearing of this news, SCL's stock price dropped $0.60 cents per share. The price has continued along a downward slope through the date of the filing of this action and, as a result of the foregoing, the Notes have lost millions of dollars in value.
If you are a holder of SCL Senior Notes and are a member of the class described above, you may, not later than October 9, 2006, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders, employee investors and consumers and is responsible for hundreds of millions of dollars in recoveries. You can obtain a copy of the complaint by visiting the Wechsler Harwood website at http://www.whesq.com or by contacting the firm directly. The Wechsler Harwood website contains detailed information regarding this matter and additional information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact plaintiff's counsel Jeffrey M. Norton at 877-935-7400 (ext. 286) or Jennifer K. Hirsh (ext. 291).
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca