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Third Avenue, Plaintiffs Reach Settlement in Suits over Focused Credit Fund Collapse

Plaintiffs have agreed to a $14.25 million settlement in their securities class action against the Third Avenue Trust, Third Avenue Management LLC, officers and trustees of Third Avenue, and an affiliated broker-dealer. The defendants did not admit any wrongdoing and the settlement is still subject to a judge’s approval. According to court documents, several actions were filed in 2016 against the defendants based on alleged misrepresentations in the Third Avenue Focused Credit Fund’s registration statement and/or the management and operation of the fund. The complaints alleged that the defendants made false and misleading statements prior to the company’s announcement that it would liquidate the fund. In December 2015, the fund’s Board of Trustees decided to place the struggling fund’s assets in a liquidating trust and initiate a plan of liquidation, leading to a chain of highly publicized events that drew industry and SEC scrutiny. The Fund is currently being liquidated pursuant to the plan of liquidation and the SEC’s December 16, 2015 order.