a. What is the Settlement Fund?
The proposed Settlement provides for Defendants’ insurers to pay fourteen million seven hundred fifty thousand dollars ($14,750,000) into a settlement fund (the “Settlement Fund”). The Settlement is subject to Court approval. Also, subject to the Court’s approval, a portion of the Settlement Fund will be used to pay attorneys’ fees with interest and reasonable litigation expenses to Plaintiffs’ Counsel, and any Award to Lead Plaintiffs. A portion of the Settlement Fund also will be used to pay taxes due on interest earned by the Settlement Fund, if necessary, and the costs of the claims administration, including the costs of printing and mailing this Notice and the costs of publishing notice. After the foregoing deductions from the Settlement Fund have been made, the amount remaining (the “Net Settlement Fund”) will be distributed to Settlement Class Members who submit timely, valid claims, according to the Plan of Allocation to be approved by the Court.
b. What can you expect to receive under the proposed Settlement?
Your share of the Net Settlement Fund will or may depend on: (i) the number of claims filed; (ii) the dates you purchased and sold TERP securities; (iii) the prices of your purchases and sales; (iv) the amount of administrative costs, including the costs of notice; and (v) the amount awarded by the Court to Plaintiffs’ Counsel for attorneys’ fees, costs, and expenses and to Plaintiffs.
The Claims Administrator will determine each Settlement Class Member’s pro rata share of the Net Settlement Fund based upon each Settlement Class Member’s valid “Recognized Loss.” The Recognized Loss formula is not intended to be an estimate of the amount that a Settlement Class Member might have been able to recover after a trial; it also is not an estimate of the amount that will be paid to Settlement Class Members pursuant to the Settlement. The Recognized Loss formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Settlement Class Members with valid claims.
The Net Settlement Fund will be distributed to Settlement Class Members who submit a Proof of Claim and Release Form and whose claims for recovery are allowed by the Claims Administrator pursuant to the terms of the Settlement Stipulation or by order of the Court under the below Plan of Allocation, which reflects Plaintiffs’ contention that because of the alleged misrepresentations made by Defendants, the price of TERP securities was artificially inflated during the relevant period and that certain subsequent disclosures caused changes in the inflated price of TERP securities. Defendants have denied and continue to deny these allegations and any and all allegations of wrongdoing, fault, and liability or damage whatsoever asserted in the Action.
See page 6 of the Notice for the Proposed Plan of Allocation.