UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

ALLAN HEWI`17, Individually and On Behalf OfAll Others Similarly Situated,

vs .

Plaintiff,

Frv

r`F~ M

SEA CONTAINERS LTD., JAMES SHERWOOD,DANIEL J . O'SULLIVAN, ROBERTMACKENZIE and !AN C . DURANT ,

Defendants .

006

CAS x~S

Plaintiff alleges the following based upon the investigation of plaintiff's counsel, whic h

included a review of United States Securities and Exchange Commission ("SEC") filings by Sea

Containers Ltd . ("SCL" or the "Company"), as well as regulatory filings and reports, securities

analysts reports and advisories about the Company, press releases, and media reports about the

Company, and plaintiff believes that substantial additional evidentiary support will exist for the

allegations set forth herein after a reasonable opportunity for discovery .

NATURE OF THE ACTION AND SUMMARY OF ALLEGATIONS

1 . This is a class action on behalf of all persons and entities who purchased o r

otherwise acquired the securities of SCL between March 15, 2004 and March 24, 2006, inclusiv e

(the "Class Period"), and who were damaged thereby, seeking to pursue remedies under th e

Securities Exchange Act of 1934 (the "Exchange Act") .

2. SCL was, at all relevant times, engaged in four main businesses . The first is ferry

operations mainly involving passenger and vehicle ferry services in the Baltic Sea and English

Channel . The second is passenger rail services in Britain between London and Scotland . The

third is the leasing of cargo containers, principally through SCL's unconsolidated 50%150% GE

SeaCo SRL joint venture ("GE SeaCo") with General Electric Capital Corporation, to a

1 :rya, . . _~. F w

Case x

CLASS ACTIONVIOLATIONS OSECURITIES LAWS

diversified customer base of liner ship operators and others throughout the world, and the

manufacture and repair of container equipment . The fourth business is ownership of and/or

investment in hotels, restaurants, tourist trains and river cruise businesses located throughout the

world through Orient-Express Hotels Ltd ., an unconsolidated company in which SCL owns a

25% equity interest (`°OEH") . In addition, SCL engages in property development, perishable

commodity production and sales, and publishing .

3 . This action alleges that SCL's Class Period financial statements, disseminated i n

press releases and SEC filings, were materially false and misleading because, among other

things: (a) the Company had overvalued long-lived assets related to its ferry and container

businesses by hundreds of millions of dollars ; (b) the Company's reported earnings were

materially overstated ; (c) the Company's internal controls and procedures were deficient and its

financial reports inherently unreliable ; (d) the Company's reported financial results deceived

investors regarding the Company's true historical results and prospects ; and (e) the Company

had overstated its gain on the sale of its interest in OEH .

4. The trust emerged on March 24, 2006 . On that date, before the commencement of

regular trading, SCL disclosed that it was completely quitting the ferry business, including its

SeaStreak commuter service between New York City and New Jersey, taking a $500 million

charge, and that it was in talks to amend some of its loan agreements . Defendant MacKenzie,

Chief Executive Officer of Sea Containers since January 2006, told ; analysts in a conference call

that the Company's ferry business had "deteriorated significantly" in 2005 due to raising fuel

costs and reduced demand and that he aimed to sell off the Company's ferry businesses by the

end of 2006. The Company further disclosed that it would restate its earnings for all four

quarters of 2005 and delay filing its annual reports with the U .S . Securities and Exchange

Commission until April to allow time to finalize bank negotiations and outstanding accounting

issues .

5 . On this news the Company's share price dropped by 37 .9%, from the March 24,

2006 per share opening price of $12 to a closing price of $71 .45. During the Class Period, the

2

Company issued and sold, at artificially inflated prices, $103,000,000 aggregate principa l

amount of unsecured 10-1/2% senior notes due 1012 in an underwritten public offering .

JURISDICTION AND VENUE

6 . The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) o f

the Exchange Act [15 U.S.C. §§ 78j(b) and 78t(a)], and Rule lOb-5 promulgated thereunder b y

the SEC [ 17 C .F.R. § 240.lOb-5] .

7 . This Court has jurisdiction over the subject matter of this action pursuant to 2 8

U.S.C. §§ 1331 and 1337 and Section 27 of the Exchange Act [15 U .S .C. § 78aa] .

8. Venue is proper in this District pursuant to Section 27 of the Exchange Act, 1 5

U.S.C. § 78aa, and 28 U .S .C § 1391(b) . Many of the acts charged herein occurred in substantial

part in this District and defendant does substantial business in this district, In addition, SC L

stock trades on the New York Stock Exchange ("NYSE"), based in this District .

9. In connection with the acts alleged in this complaint, defendants, directly o r

indirectly, used the means and instrumentalities of interstate commerce, including, but no t

limited to, the mails, interstate telephone communications and the facilities of the NYSE .

PARTIES

10. Plaintiff purchased SCL common stock during the Class Period, as set forth in th e

certification, annexed hereto, and was injured economically as alleged herein .

It . Defendant SCL is a Bermuda corporation . headquartered at 22 Victoria Street ,

Hamilton HMEX, Bermuda. The principal market on which the Company's Class A and B

common shares are traded is the New York Stock Exchange. Their trading symbols are SCR-A

and SCR-B, respectively . Both classes are also listed on the Pacific Exchange . The Company

was, at all relevant times, party to certain credit facilities that imposed debt/equity ratio,

minimum shareholders' equity and other financial requirements .

12. Defendant James Sherwood ("Sherwood") is SCL's founder and was SCL's Chie f

Executive Officer, President and Chairman . On December 1, 2005, Sherwood resigned as Chief

Executive Officer and President . On March 21, 2006, he resigned as Chairman .

3

13. Defendant Robert Mackenzie ("Mackenzie") served as SCL's Chief Executive

Officer from January 5, 2006 through the end of the Class Period .

14. Defendant Daniel J . O'Sullivan ("O'Sullivan") was, from the commencement of

the Class Period until January 1, 2005, SCL's Chief Financial Officer .

15. Defendant Ian C . Durant ("Durant") was, from January 5, 2005 until the end of

the Class Period, SCL's Chief Financial Officer.

16. Defendants Sherwood, Mackenzie, O'Sullivan and Durant are collectively

referred to herein as the "Individual Defendants ."

17. Because of the individual Defendants' position with the Company, they ha d

access to the adverse undisclosed information about its business, operations, products,

operational trends, financial statements, markets and present and future business prospects via

access to internal corporate documents (including the Company's operating plans, budgets and

forecasts and reports of actual operations compared thereto), conversations and connections with

other corporate officers and employees, attendance at management and Board of Directors

meetings and committees thereof and via reports and other information provided to them in

connection therewith.

18 . It is appropriate to treat the Individual Defendants as a group for pleadin g

purposes and to presume that the false, misleading and incomplete information conveyed in the

Company's public filings, press releases and other publications as alleged herein are the

collective actions of the narrowly defined group of defendants identified above. Each of the

above officers of SCL, by virtue of their high-level positions with the Company, directly

participated in the management of the Company, was directly involved in the day-to-day

operations of the Company at the highest levels and was privy to confidential proprietary

information concerning the Company and its business, operations, products, growth, financial

statements, and financial condition, as alleged herein . Said defendants were involved in drafting,

producing, reviewing and/or disseminating the false and misleading statements and information

alleged herein, were aware or recklessly disregarded, that the false and misleading statement s

Q

were being issued regarding the Company, and approved or ratified these statements, in violation

of the federal securities laws .

19. As officers and controlling persons of a publicly held company whose common

stock was, and is, registered with the SEC pursuant to the Exchange Act, traded on the NYSE

during the Class Period, and governed by the provisions of the federal securities laws, the

Individual Defendants each had a duty to disseminate promptly, accurate and truthful

information with respect to the Company's financial condition and performance, growth,

operations, financial statements, business, products, markets, management, earnings and present

and future business prospects, and to correct any previously issued statements that had become

materially misleading or untrue, so that the market price of the Company's publicly traded

securities would be based upon truthful and accurate information . The Individual Defendants'

misrepresentations and omissions during the Class Period violated these specific requirements

and obligations .

20. The Individual Defendants participate in the drafting, preparation, and/or approval

of the various public reports and other communications complained of herein and were aware of,

or recklessly disregarded, the misstatements contained therein and omissions therefrom, and

were aware of their materially false and misleading nature . Because of their Board membership

and/or executive and managerial positions with SCL, each of the Individual Defendants had

access to the adverse undisclosed information about SCL's business prospects and financial

condition and performance as particularized herein and knew (or recklessly disregarded) that

these adverse facts rendered the positive representations made by or about SCL and its business

issued or adopted by the Company materially false and misleading .

21 . The Individual Defendants, because of their positions of control and authority a s

officers and/or directors of the Company, were able to and did control the content of the various

SEC filings, press releases and other public statements pertaining to the Company during the

Class Period . Each Individual Defendant was provided with copies of the documents alleged

herein to be misleading prior to or shortly after their issuance and/or had the ability and/o r

5

opportunity to prevent their issuance or cause them to be corrected . Accordingly, each of the

Individual Defendants is responsible for the accuracy of the public reports and releases detailed

herein and is therefore primarily liable for their representations contained therein.

22. Each of the is liable as a participant in a fraudulent scheme and course of

business that operated as a fraud or deceit on purchasers of SCL common stock by disseminating

materially false and misleading statements and/or concealing material adverse facts . The

scheme: (i) deceived the investing public regarding SCL's business, finances, financial

statements and the intrinsic value of SCL common stock ; and (ii) caused plaintiff and other

members of the Class to purchase SCL securities at artificially inflated prices .

PLAINTIFF'S CLASS ACTION ALLEGATION S

23. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or

otherwise acquired the securities of SCL between March 15, 2004 and March 26, 2006,

inclusive, and who were damaged thereby. Excluded from the Class are defendants, the officers

and directors of the Company, at all relevant times, members of their immediate families and

their legal representatives, heirs, successors and assigns and any entity in which defendants have

or had a controlling interest. The members of the Class are so numerous that joinder of all

members is impracticable . As of October 31, 2005, 26, 145, 152 Class A common shares and

14,321,195 Class B common shares of SCL were outstanding including 12,900,000 Class B

shares owned by a subsidiary of the registrant .

24. While the exact number of Class members is unknown to plaintiff at this time an d

can only be ascertained through appropriate discovery, plaintiff believes that there are hundreds

or thousands of members in the proposed Class . Record owners and other members of the Class

may be identified from records maintained by SCL or its transfer agent and may be notified of

the pendency of this action by mail, using the form of notice similar to that customarily used in

securities class actions .

6

25. Plaintiff's claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by defendants' wrongful conduct in violation of

federal law that is complained of herein.

26. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation .

27. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class . Among the

questions of law and fact common to the Class are :

a. whether the federal securities laws were violated by defendants' acts a s

alleged herein ;

b. whether statements made by defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and financial

statements of SCL; and

c. to what extent the members of the Class have sustained damages and the

proper measure of damages .

28. A class action is superior to all other available methods for the fair and efficien t

adjudication of this controversy since joinder of all members is impracticable . Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them . There will be no difficulty in the management of this action as

a class action .

7

Management periodically evaluates the recoverability of long-lived assets,including containers, ships, property and finite-lived intangible assets, wheneverevents or changes in circumstances indicate that the carrying amount may not berecoverable. These evaluations include analyses based on the cash flowsgenerated by the underlying assets, profitability information including estimatedfuture operating results, trends or other information including estimated futureoperating results, trends or other determinants of fair value. If the value of theasset determined by these evaluations is less than its carrying amount, a loss isrecognized for the difference between the fair value and the carrying value of theasset . Future adverse changes in market conditions or poor operating results ofthe related business may indicate an inability to recover the carrying value of ti-e,assets, thereby possibly requiring an impairment charge in the future .

In accordance with SFAS No . 142, "Goodwill and Other IntangibleAssets", indefinite-lived intangible assets and goodwill must be evaluatedannually for impairment. Goodwill impairment testing under SFAS No . 142 isperformed in two steps, first, the determination of impairment based upon the fairvalue of a reporting unit as compared with its carrying value and, second, if thereis an impairment, the measurement of the amount of impairment loss bycomparing the implied fair value of goodwill with the carrying amount of thatgoodwill . As of December 31, 2003 and 2002, SCL determined the carryingvalue of all its operating segments was less than their respective derived fairvalues, indication that there was no impairment of the recorded goodwill andindefinite-lived intangible assets . To determine fair value, SCL relied onvaluation models utilizing discounted cash flows .

30. With respect to the Company's controls and procedures, the Form 10-K stated a s

follows:

The Company's chief executive and financial officers have evaluated theeffectiveness of the Company's disclosure controls and procedures (as defined inSEC Rule 13a-15(e)) as of December 31, 2003 and found no material deficienciesor weaknesses . There have been no changes in the Company's internal controlover financial reporting (as defined in SEC Rule 13a-15(f)) during the fourthquarter of 2003 that have materially affected, or are reasonably likely tomaterially affect, the Company's internal control over financial reporting .

31. The Form 10-K contained as an exhibit a "Code of Business Practices fo r

Principal Executive, Financial and Accounting Officers" that had been adopted by SCL's Boar d

of Directors in October 2003 (the "Code") . The Code stated, in pertinent part, as follows :

Accurate Period Reports

Full, fair, accurate, timely and understandable disclosure in the Company'sreports and other documents filed with the U .S. Securities and ExchangeCommission and in other public communications by the Company, are legallyrequired and are important for the success of the Company's business . ThePrincipal Officers must exercise high standards of care in preparing these reportsand communications in accordance with the following guidelines :

8

• All Company accounting records, as well as reports produced from thoserecords, must be in accordance with the laws of each applicablejurisdiction .

All records must fairly and accurately reflect the transactions oroccurrences to which they relate.

• All records must fairly and accurately reflect, in reasonable detail, theCompany's assets, liabilities, revenues and expenses .

The Company's accounting records must not contain any false orintentionally misleading entries .

• No transactions should be intentionally misclassified as to accounts oraccounting periods .

• All transactions must be supported by accurate documentation inreasonable detail and recorded in the proper account and in the properaccounting period.

• No information should be concealed from the Company's independentauditor.

• Compliance with the Company's system of internal accounting controls isrequired.

Compliance and Accountability

The Principal Officers are expected to comply with both the letter and spirit of allapplicable governmental laws, rules and regulations .

If a Principal Officer fails to comply with this Code, and/or with any applicablelaws, he or she will be subject to disciplinary measures, up to and includingdismissal from the Company .

Reporting Violation s

Any violation or potential violation of this Code or any concern about the Code'sapplication in any particular situation must be promptly reported to the Board ofDirectors or its Audit Committee . The contact person is Robert M . Riggs .

32. The Form 10-K contained certifications, signed by defendants Sherwood and

O'Sullivan, that stated as follows :

1 . 1 have reviewed this annual report on Form 10-K of Sea ContainersLtd. for the year ended December 31, 2003 ;

2 . Based on my knowledge, this report does not contain any untruestatement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect top the period covered by this report ;

9

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

ALLAN HEWITT, Individually and On Behalf OfAll Others Similarly Situated,

vs .

Plaintiff,

Case Nb:'-

CLASS ACTIONVIOLATIONS O,9SECURITIES LAWS

I re 2006

IRS

SEA CONTAINERS LTD., JAMES SHERWOOD,DANIEL J. O'SULLIVAN, ROBERTMACKENZIE and LAN C. DURANT,

Defendants .

Plaintiff alleges the following based upon the investigation of plaintiff's counsel, whic h

included a review of United States Securities and Exchange Commission ("SEC") filings by Sea

Containers Ltd . ("SCL" or the "Company"), as well as regulatory filings and reports, securities

analysts reports and advisories about the Company, press releases, and media reports about the

Company, and plaintiff believes that substantial additional evidentiary support will exist for the

allegations set forth herein after a reasonable opportunity for discovery .

NATURE OF TIE ACTION ANDS kRY OF ALLEGATION S

1. This is a class action on behalf of all persons and entities who purchased o r

otherwise acquired the securities of SCL between March 15, 2004 and March 24, 2006, inclusiv e

(the "Class Period"), and who were damaged thereby, seeking to pursue remedies under the

Securities Exchange Act of 1934 (the "Exchange Act") .

2. SCL was, at all relevant times, engaged in four main businesses . The first is ferry

operations mainly involving passenger and vehicle ferry services in the Baltic Sea and English

Channel. The second is passenger rail services in Britain between London and Scotland . The

third is the leasing of cargo containers, principally through SCL's unconsolidated 50%150% GE

SeaCo SRL joint venture ("GE SeaCo") with General Electric Capital Corporation, to a

diversified customer base of liner ship operators and others throughout the world, and the

manufacture and repair of container equipment. The fourth business is ownership of and/or

investment in hotels, restaurants, tourist trains and river cruise businesses located throughout the

world through Orient-Express Hotels Ltd ., an unconsolidated company in which SCL owns a

25% equity interest ("OEH"). In addition, SCL engages in property development, perishable

commodity production and sales, and publishing .

3. This action alleges that SCL's Class Period financial statements, disseminated i n

press releases and SEC filings, were materially false and misleading because, among other

things: (a) the Company had overvalued long-lived assets related to its ferry and container

businesses by hundreds of millions of dollars ; (b) the Company's reported earnings were

materially overstated; (c) the Company's internal controls and procedures were deficient and its

financial reports inherently unreliable ; (d) the Company's reported financial results deceived

investors regarding the Company's true historical results and prospects ; and (e) the Company

had overstated its gain on the sale of its interest in OEH .

4. The trust emerged on March 24, 2006 . On that date, before the commencement of

regular trading, SCL disclosed that it was completely quitting the ferry business, including its

SeaStreak commuter service between New York City and New Jersey, taking a $500 million

charge, and that it was in talks to amend some of its loan agreements . Defendant MacKenzie,

Chief Executive Officer of Sea Containers since January 2006, told analysts in a conference call

that the Company's ferry business had "deteriorated significantly" in 2005 due to raising fuel

costs and reduced demand and that he aimed to sell off the Company's ferry businesses by the

end of 2006. The Company further disclosed that it would restate its earnings for all four

quarters of 2005 and delay filing its annual reports with the U .S. Securities and Exchange

Commission until April to allow time to finalize bank negotiations and outstanding accounting

issues .

5 . On this news the Company's share price dropped by 37 .9%, from the March 24,

2006 per share opening price of $12 to a closing price of $7.45 . During the Class Period, the

2

Company issued and sold, at artificially inflated prices, $103,000,000 aggregate principa l

amount of unsecured 10-1/2% senior notes due 1012 in an underwritten public offering .

JURISDICTION AND VENUE

6. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) o f

the Exchange Act [15 U.S .C. §§ 78j(b) and 78t(a)], and Rule lOb-5 promulgated thereunder b y

the SEC [ 17 C .F.R. § 240 .1Ob-5] .

7. This Court has jurisdiction over the subject matter of this action pursuant to 2 8

U .S.C. §§ 1331 and 1337 and Section 27 of the Exchange Act [15 U .S.C. § 78aa] .

8 . Venue is proper in this District pursuant to Section 27 of the Exchange Act, 1 5

U.S .C. § 78aa, and 28 U .S,C § 1391(b). Many of the acts charged herein occurred in substantial

part in this District and defendant does substantial business in this district. In addition, SCL

stock trades on the New York Stock Exchange ("NYSE"), based in this District.

9. In connection with the acts alleged in this complaint, defendants, directly o r

indirectly, used the means and instrumentalities of interstate commerce, including, but no t

limited to, the mails, interstate telephone communications and the facilities of the NYSE .

PARTIES

10. Plaintiff purchased SCL common stock during the Class Period, as set forth in th e

certification, annexed hereto, and was injured economically as alleged herein .

11 . Defendant SCL is a Bermuda corporation headquartered at 22 Victoria Street,

Hamilton HMEX, Bermuda. The principal market on which the Company's Class A and B

common shares are traded is the New York Stock Exchange. Their trading symbols are SCR-A

and SCR-B, respectively . Both classes are also listed . on the Pacific Exchange . The Company

was, at all relevant times, party to certain credit facilities that imposed debt/equity ratio,

minimum shareholders' equity and other financial requirements .

12. Defendant James Sherwood ("Sherwood") is SCL' s founder and was SCL's Chief

Executive Officer, President and Chairman . On December 1, 2005, Sherwood resigned as Chie f

Executive Officer and President . On March 21, 2006, he resigned as Chairman.

3

13. Defendant . Robert Mackenzie ("Mackenzie") served as SCL's Chief Executive

Officer from January 5, 2006 through the end of the Class Period.

14. Defendant Daniel J . O'Sullivan ("O'Sullivan") was, from the commencement of

the Class Period until January 1, 2005, SCL's Chief Financial Officer.

15 . Defendant Ian C . Durant ("Durant") was, from January 5, 2005 until the end of

the Class Period, SCL's Chief Financial Officer .

16. Defendants Sherwood, Mackenzie, O'Sullivan and Durant are collectively

referred to herein as the "Individual Defendants . "

17. Because of the individual Defendants' position with the Company, they had

access to the adverse undisclosed information about its business, operations, products,

operational trends, financial statements, markets and present and future business prospects via

access to internal corporate documents (including the Company's operating plans, budgets and

forecasts and reports of actual operations compared thereto), conversations and connections with

other corporate officers and employees, attendance at management and Board of Directors

meetings and committees thereof and via reports and other information provided to them in

connection therewith.

18. It is appropriate to treat the Individual Defendants as a group for pleadin g

purposes and to presume that the false, misleading and incomplete information conveyed in the

Company's public filings, press releases and other publications as alleged herein are the

collective actions of the narrowly defined group of defendants identified above . Each of the

above officers of SCL, by virtue of their high-level positions with the Company, directly

participated in the management of the Company, was directly involved in the day-to-day

operations of the Company at the highest levels and was privy to confidential proprietary

information concerning the Company and its business, operations, products, growth, financial

statements, and financial condition, as alleged herein . Said defendants were involved in drafting,

producing, reviewing and/or disseminating the false and misleading statements and information

alleged herein, were aware or recklessly disregarded, that the false and misleading statement s

4

were being issued regarding the Company, and approved or ratified these statements, in violatio n

of the federal securities laws .

1 9 . As officers and controlling persons of a publicly held company whose common

stock was, and is, registered with the SEC pursuant to the Exchange Act, traded on the NYSE

during the Class Period, and governed by the provisions of the federal securities laws, the

Individual Defendants each had a duty to disseminate promptly, accurate and truthful

information with respect to the Company's financial condition and performance, growth,

operations, financial statements, business, products, markets, management, earnings and present

and future business prospects, and to correct any previously issued statements that had become

materially misleading or untrue, so that the market price of the Company's publicly traded

securities would be based upon truthful and accurate information . The Individual Defendants'

misrepresentations and omissions during the Class Period violated these specific requirements

and obligations .

20. The Individual Defendants participate in the drafting, preparation, and/or approva l

of the various public reports and other communications complained of herein and were aware of,

or recklessly disregarded, the misstatements contained therein and omissions therefrom, and

were aware of their materially false and misleading nature . Because of their Board membership

and/or executive and managerial positions with SCL, each of the Individual Defendants had

access to the adverse undisclosed information about SCL's business prospects and financial

condition and performance as particularized herein and knew (or recklessly disregarded) that

these adverse facts rendered the positive representations made by or about SCL and its business

issued or adopted by the Company materially false and misleading .

21 . The Individual Defendants, because of their positions of control and authority a s

officers and/or directors of the Company, were able to and did control the content of the various

SEC filings, press releases and other public statements pertaining to the Company during the

Class Period. Each Individual Defendant was provided with copies of the documents alleged

herein to be misleading prior to or shortly after their issuance and/or had the ability and/o r

5

opportunity to prevent their issuance or cause them to be corrected . Accordingly, each of the

Individual Defendants is responsible for the accuracy of the public reports and releases detailed

herein and is therefore primarily liable for their representations contained therein .

22. Each of the is liable as a participant in a fraudulent scheme and course o f

business that operated as a fraud or deceit on purchasers of SCL commnon stock by disseminating

materially false and misleading statements and/or concealing material adverse facts . The

scheme: (i) deceived the investing public regarding SCL's business, finances, financial

statements and the intrinsic value of SCL common stock ; and (ii) caused plaintiff and other

members of the Class to purchase SCL securities at artificially inflated prices .

PLAINTIFF'S CLASS ACTION ALLEGATIONS

23. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or

otherwise acquired the securities of SCL between March 15, 2004 and March 26, 2006,

inclusive, and who were damaged thereby. Excluded from the Class are defendants, the officers

and directors of the Company, at all relevant times, members of their immediate families and

their legal representatives, heirs, successors and assigns and any entity in which defendants have

or had a controlling interest. The members of the Class are so numerous that joinder of all

members is impracticable . As of October 31, 2005, 26, 145, 152 Class A common shares and

14,321,195 Class B common shares of SCL were outstanding including 12,900,000 Class B

shares owned by a subsidiary of the registrant .

24. While the exact number of Class members is unknown to plaintiff at this time an d

can only be ascertained through appropriate discovery, plaintiff believes that there are hundreds

or thousands of members in the proposed Class . Record owners and other members of the Class

may be identified from records maintained by SCL or its transfer agent and may be notified of

the pendency of this action by mail, using the form of notice similar to that customarily used in

securities class actions .

6

25. Plaintiff's claims are typical of the claims of the members of the Class as al l

members of the Class are similarly affected by defendants' wrongful conduct in violation o f

federal law that is complained of herein.

26. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation .

27 . Common questions of law and fact exist as to all members of the Class an d

predominate over any questions solely affecting individual members of the Class . Among th e

questions of law and fact common to the Class are :

a. whether the federal securities laws were violated by defendants' acts a s

alleged herein ;

b. whether statements made by defendants to the investing public during th e

Class Period misrepresented material facts about the business, operations and financial

statements of SCL; and

c. to what extent the members of the Class have sustained damages and th e

proper measure of damages .

28. A class action is superior to all other available methods for the fair and efficien t

adjudication of this controversy since joinder of all members is impracticable . Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them . There will be no difficulty in the management of this action as

a class action .

SUBSTANTIVE ALLEGATIONS

MATERIALLY FALSE AND MISLEADINGSTATEMENTS MADE DURING THE CLASS PERIO D

29. The Class Period begins on March 15, 2004, On that date, SCL filed its annual

report on Form 10-K with the SEC . In the Form 10-K, the Company stated the following wit h

respect to its valuation of long-lived assets and goodwill :

7

Management periodically evaluates the recoverability of long-lived assets,including containers, ships, property and finite-lived intangible assets, wheneverevents or changes in circumstances indicate that the carrying amount may not berecoverable. These evaluations include analyses based on the cash flowsgenerated by the underlying assets, profitability information including estimatedfuture operating results, trends or other information including estimated futureoperating results, trends or other determinants of fair value . If the value of theasset determined by these evaluations is less than its carrying amount, a loss isrecognized for the difference between the fair value and the carrying value of theasset . Future adverse changes in market conditions or poor operating results ofthe related business may Indicate an inability to recover the carrying value of theassets, thereby possibly requiring an impairment charge in the future .

In accordance with SFAS No . 142, "Goodwill and Other IntangibleAssets", indefinite-lived intangible assets and goodwill must be evaluatedannually for impairment . Goodwill impairment testing under SFAS No . 142 isperformed in two steps, first, the determination of impairment based upon the fairvalue of a reporting unit as compared with its carrying value and, second, if thereis an impairment, the measurement of the amount of impairment loss bycomparing the implied fair value of goodwill with the carrying amount of thatgoodwill . As of December 31, 2003 and 2002, SCL determined the carryingvalue of all its operating segments was less than their respective derived fairvalues, indication that there was no impairment of the recorded goodwill andindefinite-lived intangible assets . To determine fair value, SCL relied onvaluation models utilizing discounted cash flows .

30. With respect to the Company's controls and procedures, the Form 10-K stated as

follows :

The Company's chief executive and financial officers have evaluated theeffectiveness of the Company's disclosure controls and procedures (as defined inSEC Rule 13a-15(e)) as of December 31, 2003 and found no material deficienciesor weaknesses . There have been no changes in the Company's internal controlover financial reporting (as defined in SEC Rule 13a-15(f)) during the fourthquarter of 2003 that have materially affected, or are reasonably likely tomaterially affect, the Company's internal control over financial reporting .

31 . The Form 10-K contained as an exhibit a "Code of Business Practices fo r

Principal Executive, Financial and Accounting Officers" that had been adopted by SCL's Boar d

of Directors in October 2003 (the "Code") . The Code stated, in pertinent part, as follows :

Accurate Period Report s

Full, fair, accurate, timely and understandable disclosure in the Company'sreports and other documents filed with the U .S . Securities and ExchangeCommission and in other public communications by the Company, are legallyrequired and are important for the success of the Company's business . ThePrincipal Officers must exercise high standards of care in preparing these reportsand communications in accordance with the following guidelines :

• All Company accounting records, as well as repo rts produced from thoserecords, must be in accordance with the laws of each applicablejurisdiction .

• All records must fairly and accurately reflect the transactions oroccurrences to which they relate.

• All records must fairly and accurately reflect, in reasonable detail, theCompany's assets, liabilities , revenues and expenses .

• the Company' s accounting records must not contain any false orintentionally misleading entries. .

• No transactions should be intentionally misclassified as to accounts oraccounting periods .

• All transactions must be supported by accurate documentation inreasonable detail and recorded in the proper account and in the properaccounting period .

• No information should be concealed from the Company's independentauditor .

• Compliance with the Company ' s system of internal accounting con trols isrequired .

Compliance and Accountability

The Principal Officers are expected to comply with both the letter and spirit of allapplicable gove rnmental laws, rules and regulations .

If a Principal Officer fails to comply with this Code, and/or with any applicablelaws, he or she will be subject to disciplinary measures, up to and includingdismissal from the Company .

Reporting Violations

Any violation or potential violation of this Code or any concern about the Code'sapplication in any part icular situation must be promptly reported to the Board ofDirectors or its Audit Committee . The contact person is Robert M . Riggs .

32. The Form 10-K contained certifications , signed by defendants Sherwood and

O'Sullivan , that stated as follows :

I . I have reviewed this annual report on Form 10-K of Sea ContainersLtd. for the year ended December 31, 2003 ;

2. Based on my knowledge , this report does not contain any untruestatement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade , not misleading with respect top the period covered by this report ;

9

3 . Based on my knowledge, the financial statements, and otherfinancial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report ;

4. The registrant's other certifying officers and I are responsible forestablishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have :

a) designed such disclosure controls and procedures, orcaused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared ;

b) evaluated the effectiveness of the registrant's disclosurecontrols and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation ; and

c) disclosed in this report any change in the registrant'sinternal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting ; and

5. The registrant's other certifying officers and I have disclosed,based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board ofdirectors (or persons performing the equivalent function :

a) all significant deficiencies and material weaknesses in thedesign or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process,summarize and report financial information ; and

b) any fraud, whether or not material, that involvesman agement or other employees who have a significant role in the registrant'sinternal control over financial reporting .

33 . On May 4, 2004, the Company issued and sold $103, 000,000 aggregate principal

amount of unsecured 10-1/2% senior notes due 2012 in an underwritten public offering .

34. On May 7, 2004, SCL issued a press release announcing its results for the first

quarter ended March 31, 2004 . The release stated, in pertinent part, as follows :

HAMILTON, Bermuda, May 7 /PRNewswire-FirstCall/ --

Sea Containers Ltd. (NYSE: SCRA AND SCRB, www .seacontainers .com)passenger and freight transport operator, marine container lessor andmanufacturer and leisure industry investor today announced its results for the firs t

10

quarter ended March 31, 2004 . The net loss was US$16 .8 million (loss ofUS$0.73 per common share diluted) on revenue of US$37 8 million, comparedwith a net loss of US$10.3 million (loss of US$0 .49 per common share diluted) onrevenue of US$351 million in the year earlier period .

The first quarter. is normally a loss making period because of seasonal losses inthe company's ferry businesses . Salja, the company's largest ferry unit, reportedreduced operating losses of US$5 .5 million compared with losses of US$6 .8million in the year earlier period. These losses, when translated into U.S. dollars,were exaggerated by the 17% weakening of the U .S . dollar against the euro in thepast year and this effect is expected to reverse out in the main earnings thirdquarter period .

35. On May 10, 2004, SCL filed with the SEC its quarterly report on Form 10-Q for

the first quarter ended March 31, 2004 . The report was signed by defendant O'Sullivan . In the

Form 10-Q, defendants reported the financial results previously announced in the Company's

May 7, 2004 press release . As required by Section 302 of the Sarbanes-Oxley Act of 2002, the

report contained certifications signed by O'Sullivan and Sherwood that attested to the purported

accuracy of the financial statements contained in the Form l0-Q and that the Company's internal

disclosure and financial reporting controls were effective, stating as follows :

1 . 1 have reviewed this quarterly report on Form 10-Q of SeaContainers Ltd, for the quarter ended March 31, 2004 ;

2. Based on my knowledge, this report does not contain any untruestatement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this report ;

3. Based on my knowledge, the financial statements, and otherfinancial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report ;

4. The registrant's other certifying officers and I are responsible forestablishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have :

a) designed such disclosure controls and procedures, orcaused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared ;

b) evaluated the effectiveness of the registrant's disclosurecontrols and procedures and presented in this report our conclusions about the

11

effectiveness of the disclosure controls and procedures, as of the end of the periodcovered by this report based on such evaluation ; and

c) disclosed in this report any change in the registrant'sinternal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annualreport) that has materially affected, or is reasonably likely to materially affect, theregistrant's internal control over financial reporting ; and

5. The registrant's other certifying officers and I have disclosed,based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board ofdirectors. (or persons performing the equivalent function) ;

a) all significant deficiencies and material weaknesses in thedesign or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process,summarize and report financial information ; and

b) any fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the registrant'sinternal control over financial reporting .

36. The statements contained in 11129-32, 34-35, supra, were materially false and

misleading and known as recklessly disregarded as such by Defendants, for the followin g

reasons :

a. The Company had overvalued long-lived assets related to its ferry an d

container businesses by hundreds of millions of dollars ;

b. The Company's reported earnings were materially overstated;

c. The Company's internal controls and procedures were deficient and it s

financial reports inherently unreliable ; and

d , for the foregoing reasons, the Company's reported financial results

deceived investors regarding the Company' s true historical results and prospects .

37. On August 5, 2004, SCL issued a press release announcing results for its secon d

quarter, ended June 30, 2004 :

SEA CONTAINERS ANNOUNCES RESULTS FOR QUARTER AND SIXMONTHS ENDED JUNE 30, 2004 .

Hamilton, Bermuda, August 5, 2004 . Sea Containers Ltd. (NYSE:SCRA andSCRB, www . seacontainers .com) marine container lessor, passenger and freighttransport operator, and leisure industry investor , today announced its results for

12

the second quarter and six months ended June 30, 2004 . Net earnings for thequarter were $6 .8 million ($0 .29 per common share diluted) on revenue of $432 .4million, compared with net earnings of $9 .3 million ($0 .44 per common sharediluted) on revenue of $410.3 million in the year earlier period . For the sixmonths net earnings were a loss of $10 .1 million ($0.44 per common share) onrevenue of $805.7 million, compared with a net loss of $1 .0 million ($0 .05million share) on revenue of $758 .5 million in the first half of 2003 .

Mr. James E. Sherwood, President, said that the significant differences in thesecond quarter of 2004 compared with the same period of 2003 were first, thelack of earnings from the Isle of Man Steam Packet Company which was sold inthe third quarter of 2003 . In 2003 this unit had net earnings of $3 .5 million in thesecond quarter. Second, the second quarter of 2003 recorded a $5 .3 millionforeign exchange gain which was not repeated in the second quarter of 2004 .

38. On August 9, 2004, SCL filed with the SEC its quarterly report on Form 10-Q for

the second quarter ended June 30, 2004 . The report was signed by defendant O'Sullivan . In the

Form 10-Q, defendants reported the financial results previously announced in the August 5, 2004

press release. The Form l0-Q contained the same certifications as the first quarter Form 10-Q,

signed by O'Sullivan and Sherwood, that attested to the purported accuracy of the financial .

statements contained in the Form 10-Q and that the Company's internal disclosure and financial

reporting controls were effective .

39. On November 5, 2004, SCL issued a press release announcing the following

results for its third quarter ended September 30, 2004:

Hamilton, Bermuda, November 5, 2004 . Sea Containers Ltd. (NYSE: SCRA andSCRB, www .seacontainers .com) marine container lessor, passenger and freighttransport operator and leisure industry investor, today announced its results for thethird quarter and nine months ended September 30, 2004 . Net earnings for thequarter were $18 .1 million ($0.76 per common share diluted) on revenue of $492million. Revenue increased 6% over the prior year period. Excluding gains onsale of assets and non-recurring charges in 2003, net earnings declined $22 .6million from the prior year period .

For the nine months ended September 30, 2004 net earnings were $8 .1 million($0.35 per common share) on revenue of $1 .3 billion. Revenue increased 6%over the prior year period . Excluding gains on sale of assets and non-recurringcharges, net earnings declined $31 .7 million from the year earlier period.

Mr. James B . Sherwood, President, said that the third quarter was the period ofhighest demand for light fuel needed to operate the company's fast ferry fleet andthe price had soared beyond expectation at the time of the last earnings pressrelease. The company's expenditure on fuel for the quarter increased by $3million over the prior year period . Light fuel prices have reduced recently by15% from their peak but the price outlook for 2005 is uncertain .

13

40. On November 9, 2004, SCL filed with the SEC its quarterly report on Form 10- Q

for the third quarter ended September 30, 2004 . The report was signed by defendant O'Sullivan .

In the Form 10-Q, defendants reported the financial results previously announced in the

November 5, 2004 press release . The Form 10-Q contained certifications signed by O'Sullivan

and Sherwood, that attested to the purported accuracy of the financial statements contained in the

Form 10-Q and that the Company's internal disclosure and financial reporting controls were

effective .

41 . On March 29, 2005, SCL issued a press release announcing the following results

for its fourth quarter and year ended December 31, 2004 :

Hamilton, Bermuda, March 29, 2005 . Sea Containers Ltd.. (NYSE: SCRA andSCRB, www .seacontainers .com), marine container lessor, passenger and freighttransport operator and leisure industry investor, today announced its results for thefourth quarter and full year ended December 31, 2004. For the quarter a net lossof $13 .4 million (loss of $0 .54 per common share diluted) on revenue of $445million was incurred, compared with net earnings of $11 .6 million was incurred,compared with net earnings of $11 .6 million ($0 .50 per common share diluted) onrevenue of$423 million in the prior year period .

For the full year 2004 a net loss of $5 .4 million (loss of $0 .23 per common sharediluted) on revenue of $1 .74 billion was incurred, compared with net earnings in2003 of $111 .4 million ($4.72 per common share diluted) on revenue of $1 .65billion .

42. On March 31, 2005, SCL filed its annual report on Form 10-K for the year ende d

December 31, 2004. The Form 10-K was signed by defendants Sherwood and Durant, amon g

others. In the Form 10-K, the Company stated the following with respect to its critica l

accounting policies and valuation of long-lived assets and goodwill :

CRITICAL ACCOUNTING POLICIES AND ESTIMATE S

This discussion of SCL's financial condition and results of operations isbased on its consolidated financial statements, which have been prepared inaccordance with accounting principles generally accepted in the United States .The preparation of those financial statements requires management to makeestimates and judgments that affect the reported amount of assets and liabilities,revenues and expenses and related disclosure of contingent assets and liabilities atthe date of the financial statements . Actual results may differ from theseestimates under different assumptions or conditions .

14

Critical accounting policies are those that reflect significant judgments oruncertainties, and potentially result in materially different results under differentassumptions and conditions . Management believes the following are SCL's mostcritical accounting policies .

Carrying values of long-lived assets and goodwil l

Management evaluates the recoverability of long-lived assets, includingcontainers, ships, property and finite-lived intangible assets, whenever events orchanges in circumstances indicate that the carrying amount may not berecoverable . These evaluations include analyses based on the undiscounted cashflows generated by the underlying assets, profitability information includingestimated future operating results, trends or other determinants . If the value of theasset determined by these evaluation sis less than its carrying amount, a loss isrecognized for the difference between the fair value and the carrying value of theasset. Future adverse changes in market conditions or poor operating results ofthe related business may indicate an inability to recover the carrying value of theassets, thereby possibly requiring an impairment charge in the future .

In accordance with SFAS No . 142, "Goodwill and Other IntangibleAssets", indefinite-lived intangible assets and goodwill must be evaluated at leastannually for impairment. Goodwill impairment testing under SFAS No. 142 isperformed in two steps, first, the determination of impairment based upon the fairvalue of a reporting unit as compared with its carrying value and, second, if thereis an impairment, the measurement of the amount of impairment loss bycomparing the implied fair value of goodwill with the carrying amount of thatgoodwill . As of December 31, 2004 and 2003, SCL determined the carryingvalue of all its operating goodwill and its indefinite-lived intangible asset had notbeen impaired. To determine fair value, SCL relied on valuation models utilizingdiscounted cash flows .

43 . The Form 10-K contained the certifications contained in the Company's Form 10-

K for the year 2003, signed by Sherwood and Durant, as well as a certification, signed by

Sherwood and Durant, stating as follows :

The undersigned hereby certify that this report of Sea Containers Ltd . for theperiods presented fully complies with the requirements of Section 13(a) and 15(d)of the Securities Exchange Act of 1934 and that the information contained in thisreport fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of and for the periods presented in the report .

44. On May 11, 2005, SCL issued a press release report ing results for its first quarte r

ended March 31, 2005 :

Hamilton, Bermuda, May 11, 2005 . Sea Containers Ltd. (NYSE: SCRA andSCRB, www.seacontainers .com), passenger and freight transport operator, marinecontainer lessor and manufacturer, and leisure industry investor, today announcedits results for the first quarter ended March 31, 2005 . The net loss for the periodwas $6 .8 million (loss of $0.26 per common share diluted) on revenue of $38 2

15

million, compared with a net loss of $16 .9 million ($0.73 per common sharediluted) on revenue of $373 million in the prior year .

45. On May 10, 2005, SCL filed with the SEC its quarterly report on Form 01-Q for

the first quarter ended March 31, 2005 . The report was signed by defendant Durant . In the Form

10-Q, defendants reported the financial results announced in the May 11, 2005 press release .

The Form 10-Q contained Sarbanes-Oxley certifications, signed by Sherwood and Durant, that

attested to the purported accuracy of the financial statements contained in the Form 10-Q and

that the Company's internal disclosure and financial reporting controls were effective .

46. The statements contained in the Company's press releases and SEC filings, as set

forth above in 11[37-45 were materially false and misleading for the reasons set forth in 136 and

for the additional reason that the Company had overstated its gain on the sale of its interest in

OEH.

47. On August 8, 2005, SCL issued a press release announcing its results for the

second quarter ended June 30, 2005 :

August 8, 200 5

SEA CONTAINERS LTD . ANNOUNCES RESULTS FOR QUARTER ANDSIX MONTHS ENDED JUNE 30, 2005

Hamilton, Bermuda, August 8, 2005 . Sea Containers Ltd . (NYSE: SCRA andSCRB, www.seacontainers .com), passenger and freight transport operator, marinecontainer lessor and manufacturer, and leisure industry investor, today announcedits results for the second quarter and six months ended June 30, 2005 . The netloss for the second quarter was $17 .7million (loss of $0 .64 per common share) onrevenue of $458.0 million, compared with a net profit of $6 .8 million (50 .30 percommon share) on revenue of $432.4 million in the second quarter of 2004 . Forthe six months ended June 30, 2005, the net loss was $24 .6 million (loss of $0 .91per common share) on revenue of $839 .6 million, compared with the net loss of$10.1 million (loss of $0.44 per common share) on revenue of $805 .7 million inthe prior year period .

The company incurred $19 million of non-recurring expense in the first sixmonths of 2005 of which $4 .5 million was incurred in the second quarter, whileno non-recurring expense was incurred in the comparable periods of 2004 . Thisnon-recurring expense for the six months was equal to a charge of $0 .70 percommon share . The $4.5 million non-recurring expense in the second quarter of2005 was comprised of a final payment of $3 million to the Strategic RailAuthority in connection with GNER's first franchise which expired at the end ofApril, 2005 and $1 .5 million of legal expense incurred in connection with the

16

dispute with GE Capital over the costs of GE SeaCo, the marine container leasingjoint venture between Sea Containers and GE Capital .

48. On August 9, 2005, SCL filed with the SEC its quarterly report on Form l0-Q for

the second quarter ended June 30, 2005 . The report was signed by defendant Durant . In the

Form 10-Q, defendants reported the financial results announced in the August 8, 2005 press

release. The Form 10-Q contained Sarbanes-Oxley certifications, signed by Sherwood and

Durant, that attested to the purported accuracy of the financial statements contained in the Form

l0-Q and that the Company's internal disclosure and financial reporting controls were effective .

49. On November 9, 2005, SCL issued a press release announcing results for its third

quarter ended September 30, 2005 :

Hamilton, Bermuda, November 9, 2005 . Sea Containers Ltd . (NYSE: SCRA andSCRB, www.seacontainers .com), marine container lessor and rail and ferriesoperator, today announced its results for the third quarter and nine months endedSeptember 30, 2005 .

For the quarter, the net loss was $34 .4 million ($1 .25 per common share diluted)on revenue of $456 million, compared with net earnings of $18 .4 million ($0 .77per common share diluted) on revenue of $492 million in the third quarter of2004. Non-recurring charges in the third quarter of 2005, almost entirely relatedto the restructuring of the ferries business announced on November 3, 2005,accounted for $19.5 million of this loss .

For the nine months, the net loss was $58 .5 million ($2.16 per common sharediluted) on revenue of $1 .3 billion, compared with net earnings of $8 .9 million($0.35 per common share diluted) on revenue of $1 .3 billion in the year earlierperiod. Non-recurring charges account for $38 .5 million of loss in 2005 . Thenine month period benefited from a $41 .1 million gain in March 2005 on the saleof shares in Orient-Express Hotels .

50. On November 9, 2005, SCL filed with the SEC its quarterly report on Form 10- Q

for the third quarter ended September 30, 2005 . The report was signed by defendant Durant . In

the Form 10-Q, defendants reported the financial results announced in the November 9, 2005

press release. The Form 10-Q contained Sarbanes-Oxley certifications, signed by Sherwood and

Durant, that attested to the purported accuracy of the financial statements contained in the Form

10-Q and that the Company's internal disclosure and financial reporting controls were effective .

51. The statements contained in the Company's press releases and SEC filings, as se t

forth above in ¶1[ 47-50 were materially false and misleading for the reasons set forth in 136 .

17

THE TRUTH BEGINS TO ERGE

52. On March 17, 2006, the Company filed a Form NT 10-K with the SEC in which i t

disclosed that it might not be able to file its Form l0-k for the year ended December 31, 2005 o n

time . The NT Form 10-K stated, in pertinent part, as follows :

In a press release on November 3, 2005, and in a Form 8-K filed on November 8,2005, the Registrant announced that it had begun a process of restructuring itser y division, and that it would be entertaining offers to buy the core business ofHelsinki-based Silja Oy Ab, which includes eight vessels operating on threeroutes in the Baltic, The Registrant also announced its intention to sell or charterout several additional ferry vessels and to entertain offers to buy its SeaStreakbusiness in New York,

As a result of this restructuring, the Registrant announced a charge of $99 million,of which $19 million was recorded in the 2005 third quarter results . Theseamounts were preliminary and subject to adjustment, based on changes in therestructuring plan .

At the time of the November announcement, it was uncertain whether Silja wouldbe sold and, if so, what price could be obtained for the business . Subsequent tothe announcement, the sale process was begun .

Indications of interest and independent valuations of the Silja business werereceived, and preliminary bids for Silja's core business were received in January .In its November 3, 2005 press release, the Registrant also announced that it hadidentified specific containers to be sold, obsolete spare parts and manufacturingmachinery no longer required and stated that, as a result, it would take an assetimpairment charge of $30 million.

As a result of the proposed Silja sale, the Registrant is currently consideringwithdrawing completely from the ferry business . For this reason, and inconnection with the preparation of financial statements for the calendar year of2005, the Registrant's board of directors is engaged in the process of performingasset impairment testing with respect to both the Registrant's ferry assets and itscontainer assets . While this process is well advanced, it has not yet beencompleted, and the extra 15 days permitted under Rule 12b-25 will afford theRegistrant additional time to continue, and possibly complete, the assetimpairment testing process, so that the Registrant will then be in a position tocontinue with the preparation of its financial statements for 2005 andmanagement's assessment of internal control over financial reporting inaccordance with section 404 of the Sarbanes-Oxley Act of 2002 . No assurancecan be given that the Registrant will be able to file its Form 10-K Annual Reportby March 31, 2006 .

53 . On March 24, 2005, the Company issued a release stating that it was withdrawin g

from the ferry business and taking a $500 miflion impairment charge in the fourth quarter ,

Specifically, the Company stated that it would recognize a non-cash pre-tax charge o f

18

approximately $415 million related to the ferry business, and approximately $85 million related

to the container business . The Company further disclosed that, as a result of the impairment

charge, I was in violation of its debt covenants, and, moreover, that it was restating financial

results . With respect to the restatement, the release stated as follows :

On March 20, 2006, the Company concluded that it would restate its condensedconsolidated financial statements for the three months ended March 31, 2005, thesix months ended June 30, 2005 and the nine months ended September 30, 2005to correct the accounting related to the sale in March 2005 of shares in its Orient-Express Hotels investment, which was accounted for in the Company's financialstatements in accordance with the equity method of accounting . The correctionreduces the gain on the sale of Orient-Express Hotels shares by $10 .3 million forthe three months ended March 31, 2005, the six months ended June 30, 2005 andthe nine months ended September 30, 2005 from the previously reported $41 .1million to $30.8 million. The correction is the result of an error in the accountingfor the release of accumulated for eight currency exchange reserves related to thisequity method investment . The change increases net losses in these periods, buthas no impact on previously reported shareholders' equity and is a non-cashcharge. As a result of the correction, the condensed consolidated financialstatements for the interim periods ended March 31, 2005, June 30, 2005 andSeptember 30, 2005, previously filed with the U .S . Securities and ExchangeCommission, should no longer be relied upon .

The Company expects to reflect the effects of these restatements in thecomparative unaudited quarterly financial statements presented in its consolidatedfinancial statements for the year ended December 31, 2005 and in the comparativefinancial information for March 31, 2005, June 30, 2005 and September 30, 2005which will be included in the Company's q3uarterly reports on Form 10-Q during2006.

54. On this news the Company's share price dropped by 37.9%, from the March 24 ,

2006 per share opening price of $12 to a closing price of $7 .45 .

UNDISCLOSED ADVERSE INFORMATION NEGATIVELYIMPACTED THE MARKET FOR SCL SHARE S

55. The market for SCL's securities was open, well-developed and efficient at al l

relevant times . as a result of these materially false and misleading statements and failures to

disclose, SCL's common stock traded at artificially inflated prices during the Class Period . The

artificial inflation continued until at least the end of the Class Period . Plaintiff and other

members of the Class purchased or otherwise acquired SCL securities relying upon the integrity

19

of the market price of SCL's securities and market information relating to SCL, and have been

damaged thereby .

56. During the Class Period, defendants materially mislead the investing public ,

thereby inflating the price of SCL's securities, by publicly issuing false and misleading

statements and omitting to disclose material facts necessary to make defendants' statements, as

set forth herein, not false and misleading. Said statements and omissions were materially false

and misleading in that they failed to disclose material adverse information and misrepresented

the truth about the Company, its business and operations .

57. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by plaintiff and other members of the Class . As described herein, during the

Class Period, defendants made or caused to be made a series of materially false or misleading

statements about SCL's business, prospects and operations . These material misstatements and

omissions had the cause and effect of creating in the market an unrealistically positive

assessment of SCL and its business, prospects and operations, thus causing the Company's

securities to be overvalued and artificially inflated at all relevant times . Defendants' materially

false and misleading statements during the Class Period resulted in plaintiff and other members

of the Class purchasing the Company's securities at artificially inflated prices, thus causing the

damages complained of herein .

LOSS CAUSATIO N

58. Defendants' wrongful conduct, as alleged herein, directly and proximately cause d

the damages suffered by plaintiff and the Class .

59. During the Class Period, plaintiff and the Class purchased securities of SCL at

artificially inflated prices and were damaged thereby. The price of SCL common stock declined

when the misrepresentations made to the market, and/or the information alleged herein to have

been concealed from the market, and/or the effects thereof, were revealed, causing investors '

losses.

20

ADDITIONAL SCIENTER ALLEGATION S

60. As alleged herein, defendants acted with scienter in that defendants knew that the

public documents and statement issued or disseminated in the name of the Company were

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public ; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the

federal securities laws . As set forth above in detail, defendants, by virtue of their receipt of

information reflecting the true facts regarding SCL, their control over, and/or receipt and/or

modification of SCL's allegedly materially misleading misstatements and/or their associations

with the Company that made them privy to confidential proprietary information concerning SCL,

participated in the fraudulent scheme alleged herein .

FIRST CLAIM

VIOLATION OF SECTION 10(B) OFTHE EXCHANGE ACT AND RULE 10b-5

PROMULGATED THEREUNDER AGAINST ALL DEFENDANT S

61 . Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

62 . During the Class Period, SCL and the Individual Defendants, and each of them ,

carried out a plan, scheme and course of conduct that was intended to and, throughout the Class

Period, did: (i) deceive the investing public, including plaintiff and other Class Members, as

alleged herein ; (ii) artificially inflate and maintain the market price of SCL's securities ; and

(iii) cause plaintiff and other members of the Class to purchase SCL's securities at artificially

inflated prices . In furtherance of this unlawful scheme, plan and course of conduct, defendants,

and each of them, took the actions set forth herein .

63. Defendants (i) employed devices, schemes, and artifices to defraud ; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading ; and (iii) engaged in acts, practices, and a course of business tha t

21

operated as a fraud and deceit upon the purchasers of the Company's securities in an effort t o

maintain artificially high market prices for SCL's securities in violation of Section 10(b) of the

Exchange Act and Rule 10b-5 . All defendants are sued either as primary participants in the

wrongful and illegal conduct charged herein or as controlling persons as alleged below .

64. In addition to the duties to full disclosure imposed on defendants as a result o f

their making of affirmative statements and reports, or participation in the making of affirmative

statements and reports to the investing public, defendants had a duty to promptly disseminate

truthful information that would be material to investors in compliance with the integrated

disclosure provisions of the SEC as embodied in SEC Regulation S-X (17 C.F.R. Sections

210.01 et seq.) and Regulation S-K (17 C .F.R. Sections 229 .10 et seq.) and other SEC

regulations, including accurate and truthful information with respect to the Company's

operations, financial condition and earnings so that the market price of the Company's securities

would be based on truthful, complete and accurate information .

65. SCL and the Individual Defendants, individually and in concert, directly and

indirectly, by the use, means or instrumentalities of interstate commerce and/or of the mails ,

engaged and participated in a continuous course of conduct to conceal adverse materia l

information about the business, operations and future prospects of SCL as specified herein .

66. These defendants employed devices, schemes and . artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a

course of conduct as alleged herein in an effort to assure investors of SCL's value and

performance and continued substantial growth, which included the making of, or the

participation in the making of, untrue statements of material facts and omitting to state material

facts necessary in order to make the statements made about SCL and its business operations an d

future prospects in the light of the circumstances under which they were made, not misleading,

as set forth more particularly herein, and engaged in transactions, practices and a course of

business that operated as a fraud and deceit upon the purchasers of SCL's securities during the

Class Period.

22

67. Each of the Individual Defendants' primary liability, and controlling person

liability, arises from the following facts : (i) the Individual Defendants were high-level executives

and/or directors at the Company during the Class Period and members of the Company's

management team or had control thereof; (ii) each of these defendants, by virtue of his

responsibilities and activities as a senior officer and/or director of the Company was privy to and

participated in the creation, development and reporting of the Company's internal budgets, plans,

projections and/or reports ; (iii) each of these defendants enjoyed significant personal contact and

familiarity with the other defendants and was advised of and had access to other members of the

Company's management . team, internal reports and other data and information about the

Company's finances, operations, and sales at all relevant times ; and (iv) each of these defendants

was aware of the Company's dissemination of information to the investing public that they knew

or recklessly disregarded as materially false and misleading .

68. The defendants had actual knowledge of the misrepresentations and omissions o f

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them . Such

defendants' material misrepresentations and/or omissions were done knowingly or recklessly and

for the purpose and effect of concealing SCL's operating condition and future business prospects

from the investing public and supporting the artificially inflated price of its securities . As

demonstrated by defendants' overstatements and misstatements of the Company's business,

operations and earnings throughout the Class Period, defendants, if they did not have actual

knowledge of the misrepresentations and omissions alleged, were reckless in failing to obtain

such knowledge by deliberately refraining from taking those steps necessary to discover whether

those statements were false or misleading .

69. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of SCL's securities was

artificially inflated during the Class Period . In ignorance of the fact and market prices of SCL's

publicly traded securities were artificially inflated, and relying directly or indirectly on the fals e

23

and misleading statements made by defendants, or upon the integrity of the market in which the

securities trade, and/or on the absence of material adverse information that was known to or

recklessly disregarded by defendants but not disclosed in public statements by defendants during

the Class Period, plaintiff and the other members of the Class acquired SCL securities during the

Class Period at artificially high prices and were damaged thereby .

70. At the time of said misrepresentations and omissions, plaintiff and other member s

of the Class were ignorant of their falsity, and believed them to be true. Had plaintiff and the

other members of the Class and the marketplace known of the true financial condition and

business prospects of SCL, which were not disclosed by defendants, plaintiff and other members

of the Class would not have purchased or otherwise acquired their SCL securities, or, if they had

acquired such securities during the Class Period, they would not have done so at the artificially

inflated prices that they paid .

71. By virtue of the foregoing, defendants have violated Section 10(b) of th e

Exchange Act, and Rule l.0b-5 promulgated thereunder ,

72. As a direct and proximate result of defendants' wrongful conduct, plaintiff an d

the other members of the Class suffered damages in connection with their respective purchase s

and sales of the Company's securities during the Class Period .

SECOND CLAIM

VIOLATION OF SECTION 20(a) O FTHE EXCHANGE ACT AGAINST T INDIVIDUAL DEFENDANTS

73 . Plaintiff repeats and realleges each and every allegation contained above as i f

fully set forth herein .

74. The Individual Defendants acted as controlling persons of SCL within the

meaning of Section 20(a) of the Exchange Act as alleged herein . By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company's operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants ha d

24

the power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various

statements that plaintiff contends are false and misleading . The Individual Defendants were

provided with or had unlimited access to copies of the Company's reports, press releases, public

filings and other statements alleged by plaintiff to be misleading prior to and/or shortly after

these statements were issued and had the ability to prevent the issuance of the statements or

cause the statements to be corrected .

75 . In particular, each of these defendants had direct and supervisory involvement in

the day-to-day operations of the Company, and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same .

76. As set forth above, SCL and the Individual Defendants each violated Section

10(b) and Rule lOb-5 by their acts and omissions as allege din this Complaint . By virtue of their

positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of

the Exchange Act . As a direct and proximate result of defendants' wrongful conduct, plaintiff

and other members of the Class suffered damages in connection with their purchases of the

Company's securities during the Class Period .

WHEREFORE, Plaintiff prays for relief and judgment, as follows :

A. Determining that this action is a proper class action and appointing plaintiff a s

Lead Plaintiff and its counsel as Lead Counsel for the Class and certifying it as a clas s

representative under Rule 23 of the Federal Rules of Civil Procedure ;

B . Awarding compensatory damages in favor of plaintiff and the other Clas s

members against all defendants, jointly and severally, for all damage sustained as a result of

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon ;

C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees ; and

D. Such other and further relief as the Court may deem just and proper .

25

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury .

DATED: April 10, 2006

Antonio Vozzolo (AV-8773)Nadeem Faruqi (NF- 1 184)FARuQJ & FARuQI, LLP320 East 39th StreetNew York, NY 10016Telephone: 212/983-9330Facsimile: 212/983-933 1

MARK C. GAY (MG-0338)GARDY & NOTIS, LLP440 Sylvan Avenue, Suite 110Englewood Cliffs, New Jersey 07632Telephone : 201 /5 67 -7 3 7 7Facsimile : 201/567-733 7

Attorneysfor Plaintiff

26