Third Point Management asks Wilbur Ross to take his fees on Horizon deal in cash

By Jeff Pines

Washington, Sept. 23 - Third Point Management Co. LLC said Wilbur Ross and others who were members of Horizon Natural Resources Co.'s ad hoc committee of creditors should take their $3.75 million fee in cash and not in Horizon's stock.

The fee would equal 2.48 million shares.

Third Point, which said it is one of Horizon's largest creditors with $37 million of second lien notes, said it and other creditors will have their stakes unfairly diluted if the Ross-led committee takes its fee in stock instead of cash.

According to Third Point, the committee's fee was supposed to be paid in cash, according to the disclosure statement, but it was only notified on Sept. 21 about the change by Ross and the committee members. Subscriptions for Horizon's rights offering were due Wednesday.

Third Point said it tried to reach Ross by telephone twice, but was unsuccessful.

To make sure Ross and the committee can be paid in cash, Third Point, which manages $1.4 billion in assets, said it was willing to buy all 2.48 million shares.

"Wilbur, we mean you no disrespect by sending you this letter; it simply appears to us that the many years you spent generating fees as a financial advisor makes it irresistible for you to try to extract fees in your relatively new capacity as a principal," said Daniel Loeb, managing member of Third Point, in a letter to Ross that was released by Third Point.

"urge you to avoid the temptation to use your position as the head of the restructuring process or in the future as chairman of the company, to extract special, unwarranted consideration not provided to those with whom you have a fiduciary relationship, "

Other creditors, Third Point has spoken to share the firm's concern, Third Point said in the letter.

Horizon, an Ashland, Ky.-based coal mining company, filed for bankruptcy on Nov. 13, 2002. Its Chapter 11 case number is 02-14261.

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