Lipper Holdings, LLC is an investment management firm.

According to a press release dated January 13, 2003, the Complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by misrepresenting the profits, performance, value of Partnership assets, the risk of investing in the Partnership, the securities in which the Partnership was invested and the overall investment strategy of the Partnership. As the Complaint alleges, misrepresentations caused the Plaintiff and other members of the class to purchase interests in the Partnership at artificially inflated prices and/or suffered losses which they would not have otherwise suffered. Additionally, the Complaint asserts claims on behalf of the Partnership against the General Partner, Defendant Lipper Holdings, for breaches of fiduciary duty, breaches of the Partnership Agreement and unjust enrichment.

The Complaint explain that Lipper Convertibles is a Limited Partnership which was designed to invest and, which the General Partner and the other Defendants represented, was engaging in "convertible arbitrage" by investing "a preponderance of the Partnership's portfolio" in "investment grade securities of substantial public companies with market liquidity." In a letter to the Limited Partners dated February 20, 2002, the General Partner shocked the public, the convertible hedge fund industry and the Limited Partners by revealing that the assets of the Partnership had been substantially overvalued and that the actual value of the assets of the Partnership would be devalued "in the neighborhood of 40%." By March 26, 2002, the General Partner, Lipper Holdings, decided to dissolve the Partnership and sold all the securities held by the Partnership. On October 3, 2002, the General Partner filed an action for dissolution of the Partnership in the Supreme Court of New York.

Specifically, the Complaint alleges that the Defendants had artificially inflated the value of the Partnership's assets, profits and performance from 1995 through 2001 by utilizing pricing policies and valuation practices that violated the terms of the Partnership Agreement, the representations in the Offering Memoranda, and generally accepted accounting principles. The Complaint also alleges that the "Independent Inquiry" conducted by the Special Counsel hired to investigate the pricing practices at Lipper, recently concluded that the General Partner's valuations were not "supported by any rational basis." As a result of the Defendants' overvaluation, the Complaint alleges that the Limited Partners suffered damages by paying an inflated value for their investment in the Partnership, overcompensating the General Partner, Defendant Lipper Holdings, by paying an incentive compensation fee based on inflated profits and performance, and overcompensating other Limited Partners who withdrew funds from the Partnership during the period of overvaluation.

The Complaint further alleges that the Defendants invested Partnership assets in unsuitable investments - risky and illiquid securities - which violated the terms and representations of the Offering Memorandum. As a result of these unsuitable investment of Partnership assets by Defendants, the Limited Partners who are members of the Class suffered damages by being invested in risky investments in which they would not have otherwise invested and suffering losses which would not have occurred but for the investment of Partnership assets in unsuitable, risky and illiquid securities.

According to the Stipulation and Order of Dismissal with Prejudice signed by Judge Richard M. Berman on December 21, 2011, it is hereby stipulated and agreed, by and among the undersigned parties, that: The above-captioned action be, and the same is hereby, dismissed with prejudice as against Defendants Kenneth Lipper, Lipper Holdings, LLC, and Abraham Biderman, without costs or attorneys' fees to any party. The above-captioned action be, and the same is hereby, dismissed without prejudice as against Defendant Edward Strafaci. No notice of the dismissal of this action, other than the notice already provided to limited partners of Lipper Convertibles, L.P. of the dismissal of putative class claims against Mr. Lipper and Lipper Holdings, LLC in actions pending in New York Supreme Court, New York County before the Honorable Shirley Werner Kornreich, is necessary in connection with the settlement and dismissal of Plaintiffs claims.