Dan Loeb: “Prem Watsa bend over the hedge funds have something special for you”

Reuters has a special report about the Dan Loeb vs. Fairfax Financial saga. This is an excerpt from that report:

Old emails sent by the Third Point hedge fund manager and now coming to light in the Fairfax Financial litigation are coming back to haunt one of the industry’s top performers.

It was the summer of 2006 and hedge fund manager Daniel Loeb was having difficulty containing his very harsh feelings towards Fairfax Financial, the Canadian insurance giant, and its CEO, Prem Watsa.

Loeb’s New York-based fund, Third Point LLC, had placed a big bet that the shares and bonds of Fairfax and its subsidiaries would tumble. He was looking forward to cashing in his hedge fund’s chips, if and when some bad news rocked Fairfax. And he shared that enthusiasm with another hedge fund manager, in a fairly graphic
email message that recently surfaced in a five-year-old civil lawsuit filed by Fairfax against Loeb and other prominent hedge fund managers.

“Prem Watsa bend over the hedge funds have something special for you,” Loeb wrote in the June 25, 2006 email to Adam Sender, the founder of Exis Capital, whose hedge fund also was “shorting” Fairfax — that is, looking to profit from a decline in its shares. A little later that day, in an email to a consultant who was doing research for some of the hedge funds wagering on Fairfax’s fall, Loeb wrote: “die, Prem Die!”

A month later, Fairfax sued Loeb and Sender, as well as famed short-seller James Chanos and billionaire hedge fund trader Steven Cohen, claiming they had teamed up to “crush” the company’s stock. The Toronto-based insurer, which some of the defendants openly had dubbed “the next Enron,” contends Loeb, Chanos, Cohen and Sender orchestrated a multi-year campaign to spread disinformation about Fairfax’s business model to a number of well-known financial journalists.