UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  SCHEDULE 13D
                    Under the Securities Exchange Act of 1934

                               (Amendment No. 3)*



                     Flagstone Reinsurance Holdings Limited
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                                (Name of Issuer)

                    Common Shares, $0.01 par value per share
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                         (Title of Class of Securities)

                                    G3529T105
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                                 (CUSIP Number)

                                                 with a copy to:
     Gregory L. Florio, Esq.                     Robert G. Minion, Esq.
     Marathon Asset Management, LP               Lowenstein Sandler PC
     One Bryant Park, 38th Floor                 1251 Avenue of the Americas
     New York, New York 10036                    New York, New York 10020
     212.381.0159                                973.597.2424
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                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                                 August 19, 2009
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             (Date of Event which Requires Filing of this Statement)


If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  that is the subject of this  Schedule  13D, and is filing this
schedule because of Sections 240.13d-1(e),  240.13d-1(f) or 240.13d-1(g),  check
the following box. [ ]

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the schedule,  including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).





Cusip No.    G3529T105
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1.   Names of Reporting Persons.  I.R.S. Identification Nos. of above persons
     (entities only):

                Marathon Asset Management, LP
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2.   Check the Appropriate Box if a Member of a Group (See Instructions):

     (a)           Not
     (b)        Applicable
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3.   SEC Use Only

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4.   Source of Funds (See Instructions):  AF, WC
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5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
     or 2(e):
                Not Applicable
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6.   Citizenship or Place of Organization:   Delaware
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   Number of                          7. Sole Voting Power:           2,275,127*
                                         ---------------------------------------
   Shares Beneficially                8. Shared Voting Power:                 0*
                                         ---------------------------------------
   Owned by Each Reporting            9. Sole Dispositive Power:      2,275,127*
                                         ---------------------------------------
   Person With                       10. Shared Dispositive Power:            0*
                                         ---------------------------------------
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11.  Aggregate Amount Beneficially Owned by Each Reporting Person:    2,275,127*
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12.  Check if the Aggregate Amount in Row (11) Excludes Certain Shares
     (See Instructions):         Not Applicable
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13.  Percent of Class Represented by Amount in Row (11):     2.7%*
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14.  Type of Reporting Person (See Instructions):  IA
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* As of November 6, 2009,  Marathon Special  Opportunity  Master Fund, Ltd. (the
"Master Fund") and Marathon  Special  Opportunity  Liquidating  Fund,  Ltd. (the
"Liquidating  Fund" and together with the Master Fund,  the "Funds") held in the
aggregate  2,275,127  shares of common  shares,  par value  $0.01 per share (the
"Shares"), of Flagstone Reinsurance Holdings Limited, a Bermuda exempted company
(the "Company").  Marathon Asset Management,  LP, a Delaware limited partnership
(the  "Investment  Manager"),  serves  as the  investment  manager  of the Funds
pursuant to one or more Investment  Management Agreements between the Investment
Manager and the Funds. As a result,  the Investment  Manager  possesses the sole
power to vote and the sole power to direct the  disposition of all securities of
the Company  held by the Funds.  Accordingly,  as of  November 6, 2009,  for the
purposes of Rule 13d-3 under the  Securities  Exchange Act of 1934,  as amended,
the Investment  Manager is deemed to beneficially own 2,275,127  Shares, or 2.7%
of the Shares deemed issued and outstanding as of that date.


THIS SCHEDULE 13D AMENDMENT NO. 3 CORRECTS INFORMATION SET FORTH IN SCHEDULE 13D
AMENDMENT NOS. 1 AND 2 FILED BY THE INVESTMENT MANAGER WITH THE U.S.  SECURITIES
AND  EXCHANGE   COMMISSION   ON  SEPTEMBER  9,  2009  AND  SEPTEMBER  10,  2009,
RESPECTIVELY.





THIS SCHEDULE 13D AMENDMENT NO. 3 CORRECTS INFORMATION SET FORTH IN SCHEDULE 13D
AMENDMENT NOS. 1 AND 2 FILED BY THE INVESTMENT MANAGER WITH THE U.S.  SECURITIES
AND  EXCHANGE   COMMISSION   ON  SEPTEMBER  9,  2009  AND  SEPTEMBER  10,  2009,
RESPECTIVELY.


Item 5.   Interest in Securities of the Issuer.
          ------------------------------------

          Item 5 is hereby amended and restated in its entirety as follows:

          According to the Form 10-Q for the  quarterly  period ended  September
30, 2009, and filed with the  Securities and Exchange  Commission on November 3,
2009, there were 82,864,844  shares of common shares,  par value $0.01 per share
(the "Shares"),  of Flagstone  Reinsurance  Holdings Limited, a Bermuda exempted
company (the  "Company"),  issued and  outstanding as of November 2, 2009. As of
November 6, 2009,  Marathon Special  Opportunity  Master Fund, Ltd. (the "Master
Fund") and Marathon Special Opportunity Liquidating Fund, Ltd. (the "Liquidating
Fund" and together  with the Master Fund,  the  "Funds")  held in the  aggregate
2,275,127 Shares.

          Marathon Asset  Management,  LP, a Delaware  limited  partnership (the
"Investment Manager"), serves as the investment manager of the Funds pursuant to
one or more Investment  Management Agreements between the Investment Manager and
the Funds. As a result,  the Investment Manager possesses the sole power to vote
and the sole power to direct the  disposition  of all  securities of the Company
held by the Funds. Accordingly, as of November 6, 2009, for the purposes of Rule
13d-3 under the  Securities  Exchange Act of 1934,  as amended,  the  Investment
Manager is deemed to beneficially  own 2,275,127  Shares,  or 2.7% of the Shares
deemed issued and outstanding as of that date.

          The following table details (i) the transactions during the sixty days
on or prior to November 6, 2009 and (ii) the  transactions on or before November
6, 2009 that were not  disclosed  in  Schedule  13D  Amendment  Nos. 1 and 2, in
Shares,  or securities  convertible  into,  exercisable for or exchangeable  for
Shares,  by the Investment  Manager or any other person or entity  controlled by
the Investment  Manager or any person or entity for which the Investment Manager
possesses  voting or  investment  control over the  securities  thereof (each of
which was effected in an ordinary brokerage transaction).


                                      Sales
                                      -----

           Date                Security            Amount            Price

           08/12/2009           Shares              51,647           $11.2262
           08/14/2009           Shares               4,838           $9.58
           09/09/2009           Shares              38,314           $10.5437
           09/10/2009           Shares              91,301           $10.5432





           09/11/2009           Shares              10,133           $10.5115
           09/14/2009           Shares             180,779           $10.4738
           09/15/2009           Shares              92,900           $10.4603
           09/22/2009           Shares             281,989           $10.9657
           09/23/2009           Shares             778,100           $10.7078
           09/25/2009           Shares              38,301           $10.6275


          No other person is known by the  Investment  Manager to have the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Shares beneficially owned by the Investment Manager.

          As of August 26, 2009, the Investment  Manager ceased to  beneficially
own more than 5% of the outstanding Shares.





                                    Signature
                                    ---------

          After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information  set forth in this statement is true,  complete and
correct.


                                       November 6, 2009

                                       MARATHON ASSET MANAGEMENT, LP

                                       By:  Marathon Asset Management GP, LLC,
                                            its general partner


                                       By:  /s/ Andrew Rabinowitz
                                          --------------------------------------
                                          Name:  Andrew Rabinowitz
                                          Title: Chief Operating Officer/Partner




  Attention: Intentional misstatements or omissions of fact constitute Federal
                   criminal violations (See 18 U.S.C. 1001).