Mutual Funds Investment Litigation - MDL 1586

Case No. 04-md-15863

Frequently Asked Questions

1. Why Did I Receive This Notice Package?

Answer:
You or someone in your family may have purchased and/or held shares in one or more of the Columbia Mutual Funds during the period November 1, 1998 through February 25, 2004, inclusive. Or, you may currently hold shares in one of the Columbia Mutual Funds. If this description applies to you, you have a right to know about proposed Settlements of a class action lawsuit and a derivative lawsuit, and about all of your options, before the Court decides whether to approve the Settlements. If the Court approves the Settlements, after any objections or appeals are resolved, the Settlement Administrator appointed by the Court will make the payments that the Settlements allow. The Long-Form Notice explains the lawsuits, the Settlements, your legal rights, what benefits are available, who is eligible for them, and how to receive them. You can review the the Long-Form Notice on this site in "Important Case Documents."

2. What Is This Lawsuit About?

Answer:
In late 2003, a number of putative securities class action complaints were filed against Columbia Management Advisors, Inc. and related entities in various United States District Courts alleging market-timing and late trading in the Columbia Mutual Funds in violation of the federal securities laws.  Market-timing is an investment technique involving short-term, “in and out” trading of mutual fund shares, designed to exploit inefficiencies in the way mutual fund companies price their shares.  Late trading is an investment practice whereby investors are permitted to place orders to buy, sell or exchange mutual fund shares using the day’s net asset value (“NAV”) after the 4:00 p.m. eastern time cut-off, capitalizing on post-4:00 p.m. information.  On March 16, 2004, the first derivative action resulting from the same alleged market-timing and late trading practices was filed in the United States District Court for the District of Massachusetts.
In the weeks and months that followed, numerous suits were filed in District Courts throughout the country.  Various other mutual fund families identified as being involved in regulatory market-timing and late trading investigations likewise were named in numerous complaints filed in courts throughout the United States.  On February 20, 2004, the Judicial Panel on Multi-District Litigation issued an order, followed on March 3, 2004 and April 5, 2004, with the Judicial Panel's Conditional Transfer Orders Nos. 1 & 2, respectively, centralizing all of these actions in one multi-district docket in the United States District Court for the District of Maryland under the caption MDL-1586 - In re Mutual Funds Investment Litigation (the “MDL Actions”).  By letters to counsel in the MDL Actions dated April 9, 2004 and April 12, 2004, the Court assigned four Judges each a separate track of the MDL Actions, with multiple mutual fund families assigned to sub-tracks within each track.  The Columbia Sub-track was assigned to the Honorable J. Frederick Motz.
On May 25, 2004, the Court issued a case management order consolidating all class actions and other direct cases involving Alger, Columbia, Janus, MFS, One Group and Putnam mutual funds, as well as all cases filed on behalf of purchasers or holders of shares of the corporate parents of any of these entities or their investment advisors (including all cases brought nominally on behalf of the funds or corporate parents of the funds or their investment advisors and styled as derivative actions), for pretrial purposes under the caption In re Alger, Columbia, Janus, MFS, One Group and Putnam, Civil No. 04-md-15863.  By this same case management order, the Court appointed Jackie Williams as lead plaintiff for the consolidated class claims (the “Lead Class Plaintiff”) and her selection of the firm now known as Milberg LLP as lead class counsel for the MDL Columbia Sub-track (“Lead Class Counsel”).  The Court also appointed Wolf Haldenstein Adler Freeman & Herz, LLP as lead fund derivative counsel for the MDL Columbia Sub-track (“Lead Fund Derivative Counsel”).
On September 29, 2004, amended complaints were filed in the class and derivative actions (the “Complaints”). Claims were asserted in the Complaints against persons and entities affiliated with the Columbia Mutual Funds, including the investment advisor to the Columbia Mutual Funds and its affiliates, as well as unaffiliated entities, including alleged market-timers and other parties that were alleged to have participated in or facilitated the market timers’ trading of the Columbia Mutual Funds. Specifically, plaintiffs in the class action asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (“Securities Act”), Sections 34(b), 36(a), 36(b) and 48(a) of the Investment Company Act of 1940 (“ICA”), and state law.  Likewise, the plaintiffs in the derivative action asserted claims under Sections 36(a), 36(b), 47 and 48 of the ICA, Sections 206 and 215 of the Investment Advisors Act of 1940 (“IAA”), and state law.  On February 25, 2005, certain defendants moved to dismiss the Complaints.
On December 6, 2004, a Stipulation and Order Staying the MDL Actions Against the Canary Defendants in Contemplation of Settlement was filed, informing the court that the plaintiffs had entered into a Memorandum of Understanding with respect to the Canary Defendants resolving those claims in consideration of cash payments as well as cooperation by Canary personnel and production of Canary documents.
On August 25, 2005, Judge Motz issued an order addressing common issues presented in the MDL Actions.  On November 3, 2005, Judge Motz issued a letter ruling on the motions to dismiss in the Columbia Sub-track, denying in part and granting in part the motions to dismiss.  Following further briefing, the parties submitted proposed orders for the Court’s review and entry.
As the motions to dismiss were being resolved and thereafter, plaintiffs and the Columbia defendants began to discuss a possible settlement of the Actions.  Following ongoing and extensive discussions and arm’s-length negotiations, as well as informal discovery related to the merits and damages, Plaintiffs and the Columbia Defendants and BAS filed a Joint Motion to Stay Actions Against the Columbia Defendants in Contemplation of Settlement on April 5, 2006, informing the court that the Plaintiffs and the Columbia Defendants had entered into the Columbia Funds Settlement Term Sheet dated April 4, 2006 setting forth the principle terms of the settlement with the Columbia Defendants and BAS. Thereafter, the Court granted motions staying the Actions against the Columbia Defendants and BAS.
In addition, settlement discussions with the Bear Stearns Defendants and the Security Brokerage Defendants were conducted on a coordinated basis across the MDL, which led to settlement stipulations dated August 16, 2005 and October 19, 2005, respectively.
Discussions of possible settlements of the Actions proceeded with various groups of defendants at various times throughout the litigation. Agreements in principle to settle the Actions with various groups of defendants were reached at various times.

3. Why is the Class Action a class action?

Answer:
In a class action, one or more individuals and/or entities called class representatives (in this case the court-appointed Lead Class Plaintiff, Jackie Williams) sue on behalf of individuals and entities who have similar claims. All of these individuals and entities who have similar claims are referred to collectively as a Class, or individually as a Class Member. One court resolves the issues for all Class Members, except for those who exclude themselves from the Settlements. The United States District Court for the District of Maryland, the Honorable J. Frederick Motz, is in charge of the Class Action as well as the Derivative Action.

4. Why is the Derivative Action a derivative action?

Answer:
In a derivative action, one or more people and/or entities who are shareholders of a corporation sue on behalf of the corporation, alleging that the corporation was injured, and seek recovery on behalf of the corporation. In a derivative action, the corporation itself and not the individual shareholders of the corporation usually receive the direct benefit of a settlement. In this case, Harold Beardsley, Brad Smith, Edward and Iris Segel, Virginia Wilcox, Pamela Yameen, Barbara Cordani, Mayer and Morris Sutton, George Slabe, as Custodian for Jo D. Slabe UGMA, Grace Nugent and David Armetta (collectively, the “Derivative Plaintiffs”) have sued on behalf of the Columbia Mutual Funds, some or all of which will benefit from the Settlement. The Derivative Plaintiffs, together with the Lead Class Plaintiff, are referred to as “Plaintiffs” in this Notice.

5. Why Are There Settlements?

Answer:
The Court did not decide in favor of Plaintiffs or the Settling Defendants. Instead, in order to avoid the risks and costs of further litigation and trial, all parties agreed to a series of settlements. As explained above, Lead Class Plaintiff and her attorneys believe the Settlements are best for all Class Members and likewise, Derivative Plaintiffs and their counsel believe the Settlements are best for the Columbia Mutual Funds.

6. How Do I Know if I Am Part of the Settlements?

Answer:
The Class includes, all persons and entities who, at any time during the period November 1, 1998 through February 25, 2004, inclusive, purchased and/or held shares in any of the Columbia Mutual Funds, except those persons and entities that are excluded, as described in question 7 below.

7. What Are the Exceptions to Being Included?

Answer:
Excluded from the Class are: (i) any and all defendants named in any action that is part of the Columbia Subtrack of MDL-1586; (ii) for defendants who are natural persons, members of their immediate families (parents, spouses (current or former), siblings, and children), their heirs, successors or assigns, and any person acting on their behalf for purposes of collecting a payment under these Settlements; (iii) for defendants that are legal entities, their parents, subsidiaries, affiliates, successors or assigns; (iv) any entity in which any defendant has, or during the Class Period had, a controlling interest; and (v) all Columbia portfolio managers during the Class Period(defined as the person or persons with primary responsibility for the day-to-day management of the investment portfolio of a Columbia Mutual Fund during the Class Period).

8. Who is affected by the settlement of the Derivative Action?

Answer:
Because the Derivative Action is brought on behalf of the Columbia Mutual Funds, and not the individual shareholders of the Funds, the Columbia Mutual Funds will receive the direct benefit of the Settlements of the Derivative Action. Current shareholders of the Columbia Mutual Funds, or their successor funds, may receive an indirect benefit from the Settlements, such as an increase in the value of their shares.

9. I Am Still Not Sure if I Am Included.

Answer:
If you are not sure whether you are a Class Member, you can ask for free help. You can call the Settlement Administrator, Rust Consulting, Inc., at 1-877-690-7105, for more information.

10. What Do the Settlements Provide?

Answer:
The proposed Settlements provide for payment of a total of $12,653,000 in cash (the “Settlement Funds”), comprised of (i) $9,600,000 paid on behalf of the Columbia Defendants and BAS, (ii) $588,000 paid on behalf of the Bear Stearns Defendants, (iii) $2,450,000 paid on behalf of the Security Brokerage Defendants, and (iv) $15,000 paid on behalf of the Canary Defendants. The Settlement Funds plus all interest earned thereon shall be referred to as the “Gross Settlement Funds.”
The balance of these Gross Settlement Funds, after payment of court-approved attorneys’ fees and litigation expenses (the “Net Settlement Funds”), will be divided among Class Members and the Columbia Mutual Funds in accordance with the Plan of Allocation described below. With the approval of the OAG, Class Counsel will cause the Settlement Administrator to distribute the OAG/Canary Amount to Class Members in accordance with the Plan of Allocation described below.
See Question 11 below for more details regarding the allocation of the Settlement Funds.

11. How Much Will My Payment Be?

Answer:
The Net Settlement Funds will first be split into a component for Class Members and a component for the Columbia Mutual Funds. The Columbia Mutual Funds will receive $1.5 million (less a pro rata share of court-approved fees and litigation expenses) and the remainder will be distributed among Class Members based on their holdings of Columbia Mutual Funds during the Class Period (the “Class Settlement Funds”). Lead Class Counsel have, in consultation with expert advisors, developed an analysis of when and to what extent the various Columbia Mutual Funds were allegedly affected by the activities alleged in the Actions. Because the analysis developed by Lead Class Counsel shows that some Columbia Mutual Funds were potentially affected more than others by those alleged activities, and that the potential impact of those alleged activities varied from time to time, Lead Class Counsel developed a Plan of Allocation that provides relatively larger distributions for holdings that were, according to their analysis, more strongly affected by the alleged activities.

The Columbia Defendants maintain records of the investments in Columbia Mutual Funds by shareholders who held their investments through direct Columbia retail accounts. Class Members who invested in Columbia Mutual Funds through direct Columbia Funds Services, Inc. retail accounts are not required to file a proof of claim in order to receive a distribution from the Settlements.

Class Members who invested in Columbia Mutual Funds through brokers or other intermediaries are required to file a proof of claim in order to receive a distribution from the Settlements. Those Class Members will be required to submit a separate Proof of Claim and Release form (“Proof of Claim”), signed under penalty of perjury and supported by such documents as specified in the Proof of Claim as are reasonably available to the claimant, in order to establish the claimant’s holdings in the Columbia Mutual Funds during the relevant period.
Class Members who purchased or held shares in any of the Columbia Mutual Funds may receive a direct payment from the Class Settlement Funds.
All Proofs of Claim must be postmarked or received by December 8, 2010, addressed as follows:
In re Mutual Funds Investment Litigation – Columbia Sub-Track
c/o Rust Consulting, Inc.
Settlement Administrator
P.O. Box 2338
Faribault, MN 55021-9038
 
Class Members who are uncertain about whether they are required to file a proof of claim should seek assistance from the Settlement Administrator.
A Class Member’s “Recognized Claim” will depend upon when, in which funds, and in what amounts the Class Member invested, and can be calculated by following the Plan of Allocation described herein. A Class Member’s actual recovery from the Settlements will depend upon the size of the Class Member’s Recognized Claim as a share of the aggregate Recognized Claims of all Class Members. Provided the Settlements are approved, the Settlement Administrator will distribute the Class Settlement Funds (and, if the OAG authorizes the distribution, the OAG/Canary Amount) according to the Plan of Allocation.

12. How Will I Receive a Payment?

Answer:
To qualify for a payment, you must be an eligible Class Member. NOTE: Class Members who held shares in Columbia Mutual Funds directly through Columbia Mutual Funds, Inc. retail accounts do not need to submit a Proof of Claim. Class Members who invested in Columbia Mutual Funds through a broker or other intermediary must submit a Proof of Claim. The Proof of Claim form is available on this site in "Proof of Claim." Please read the instructions carefully, fill out the Proof of Claim, include all the documents requested, sign it, and mail it in an envelope postmarked no later than December 8, 2010. Please retain a copy of everything you mail, in case the materials are lost or destroyed during shipping.

13. When Will I Receive My Payment?

Answer:
The Court will hold a hearing on October 21-22, 2010, to decide whether to approve the Settlements. If the Court approves the Settlements, there may be appeals. It is always uncertain whether appeals, if any, can be resolved, and resolving them can take time, perhaps several years. In addition, the Settlement Administrator must process all of the Proofs of Claim. The processing is complicated and will take many months. Please be patient.

14. What Am I Giving Up By Staying in the Class?

Answer:
Unless you exclude yourself, you are staying in the Class, and that means that you cannot sue, continue to sue, or be part of any other lawsuit against the Settling Defendants and/or the Released Parties, Bear Stearns Released Parties, Security Brokerage Released Parties and Canary Released Parties (as defined below) about the Released Claims (as defined below). It also means that all of the Court’s orders will apply to you and legally bind you, and you will release forever any claims you may have against the Settling Defendants relating to market-timing, late-trading or excessive trading in the Columbia Mutual Funds during the Class Period.
In the settlement with the Columbia Defendants and BAS:
“Released Parties” means:
(a)        Bank of America Corporation and all of its present and former affiliates and subsidiaries, including, without limitation, all present and former affiliates and subsidiaries of FleetBoston Financial Corporation, including, without limitation, Columbia Management Group, Inc., Columbia Management Advisors, Inc., Columbia Wanger Asset Management, L.P., Columbia Funds Distributors, Inc., and Columbia Management Services, Inc., and Banc of America Securities, LLC and all of their predecessors, successors and assigns, and all of those entities’ present and former employees, officers, directors, trustees, members, partners, managers, agents, and counsel;
(b)        all the Columbia Mutual Funds and Columbia Trusts and Registrants[1] and all of their predecessors, successors and assigns, and all of those entities’ present and former employees, officers, directors, trustees, members, partners, managers, agents, and counsel;
(c)        all the Columbia Settling Trustees[2] and each of their families, heirs, spouses, successors, general or limited partners or partnerships, personal or legal representatives, estates, administrators, related or affiliated entities, or any trust of which any of the Columbia Settling Trustees are the settlers or which is for the benefit of any family member or any of the Columbia Settling Trustees;
(d)        all other entities that provided advisory, distribution, management, administration or other services to the Columbia Mutual Funds during the Class Period, and all of those entities’ present and former employees, officers, directors, trustees, members, partners, managers, agents, and counsel, but only with respect to such services performed for the Columbia Mutual Funds, and not with respect to any services provided for any funds other than the Columbia Mutual Funds;
(e)        all Columbia Defendants not covered by subsections (a) through (d) of this section, if any, and all of their present and former employees, officers, directors, trustees, members, partners, managers, agents, counsel, predecessors, successors and assigns or, in the case of individuals, each of their families, heirs, spouses, successors, general or limited partners or partnerships, personal or legal representatives, estates, administrators, related or affiliated entities.
“Released Claims” means, collectively, any and all claims, rights, demands, charges, complaints, actions, suits, liabilities and causes of action, whether known or unknown (including Unknown Claims), whether suspected or unsuspected, whether accrued or un-accrued, and whether direct, derivative or brought in any other capacity, that the Releasing Plaintiff Parties had, have now, or may have against the Released Parties arising under the laws, regulations or common law of the United States of America, any state or political subdivision thereof, or any foreign country or jurisdiction, that concern or relate in any way, whether directly or indirectly, to excessive or short-term trading, market-timing, and/or late-trading in the Columbia Mutual Funds and/or the valuation or pricing of the Columbia Mutual Funds, including, without limitation, all claims that were brought by the Releasing Plaintiff Parties or that could have been brought based on allegations that the Released Parties allowed, failed to prevent, cleared, brokered, financed, facilitated, subjected investors to, or were otherwise involved in such trading (all only to the extent of such trading in the Columbia Mutual Funds), and including, without limitation, claims for compensatory damages, whether direct or consequential, punitive damages, treble damages, penalties, injunctive or equitable relief, declaratory relief, rescission, disgorgement, restitution or the return or forfeiture of advisory, management, or other fees. The Released Claims include, without limitation:
(a)        all of the claims that were brought against any of the Released Parties in the Columbia Consolidated Amended Class Action Complaint and the Columbia Consolidated Amended Fund Derivative Complaint, both of which were filed on September 29, 2004 in the Columbia sub-track in MDL-1586;
(b)        claims that the manner in which the shares of some or all of the Columbia Mutual Funds were priced or valued exposed the funds and their shareholders to harm from market-timing, late-trading or short term or excessive trading;
(c)        all of the claims brought against any of the Released Parties in the complaints filed in or transferred to the Columbia sub-track in MDL-1586, including all of the claims asserted in Delaventura v. Columbia Acorn Trust, et al., No. 05-CV-1093, and Kelso v. Columbia Acorn Trust, et al., No. 03-CV-769, and all of the claims asserted in Vogeler v. Columbia Acorn Trust, et al., No. 03 L 1550 (originally filed in the Circuit Court, Third Judicial Circuit, Madison County, Illinois).
(d)        Notwithstanding the foregoing, Released Claims do not include the claims asserted in the Consolidated Amended Class Action Complaint in In re Columbia Entities Litigation, Master File 04-11704(MBB) (D. Mass.).
In the settlement with the Bear Stearns Defendants:
“Bear Stearns Released Parties” means Bear, Stearns & Co. Inc., Bear, Stearns Securities Corp., and The Bear Stearns Companies Inc., currently known as J.P. Morgan Securities Inc., J.P. Morgan Clearing Corp. and The Bear Stearns Companies LLC, respectively, and all of their respective Related Parties (“Related Parties” means (a) with respect to natural persons, all of their past and present agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers, executors and administrators; (b) with respect to legal entities other than natural persons, all of their past and present parents, subsidiaries, affiliates, general partners, limited partners, officers, directors, trustees, members, employees, agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers, in any and all capacities; and (c) all of the predecessors, successors, heirs and assigns of the foregoing).
“Released Claims” means any and all claims, rights, causes of action, counts, or liabilities against any or all of the Bear Stearns Released Parties, whether direct, derivative or brought in any other capacity, whether under federal or state law, whether known or unknown (including “Unknown Claims” as defined below), whether suspected or unsuspected, whether accrued or unaccrued, whether asserted or unasserted, concerning in any respect, directly or indirectly, market-timing, late-trading, or short-term or excessive trading in any of the Columbia Mutual Funds during all or any part of the Class Period, including any claims that any or all of the Bear Stearns Released Parties allowed, assisted, cleared, brokered, financed, caused, acquiesced in, participated or engaged in, provided the means for, subjected investors to or otherwise facilitated or were responsible for market-timing, late-trading, or short-term or excessive trading and including, without limitation, all of the claims and causes of action that were brought and all of such claims and causes of action that could have been brought against any or all of the Bear Stearns Released Parties in the Class Action or the Fund Derivative Action, or in any other legal proceeding or forum.
In the settlement with the Security Brokerage Defendants:
“Security Brokerage Released Parties” means Daniel G. Calugar and Security Brokerage, Inc. (now known as Symphonic Alpha, LLC), DCIP, L.P., RCIP, L.P., the Security Brokerage, Inc. Profit Sharing Trust (now known as the Calugar Corporation Profit Sharing Trust) and any of their successors, and all of their respective Related Parties (“Related Parties” means (a) with respect to natural persons, their past or present agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers, executors and administrators; (b) with respect to legal entities other than natural persons, their past and present, parents, subsidiaries, general partners, limited partners, officers, directors, trustees, members, employees, agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers; and (c) the predecessors, successors, heirs and assigns of the foregoing).
“Released Claims” means any and all claims against the Security Brokerage Released Parties, whether direct, derivative or brought in any other capacity, whether under federal or state law, whether known or unknown (including “Unknown Claims”), whether suspected or unsuspected, whether accrued or unaccrued, concerning in any respect, directly or indirectly, the purchase, sale or retention of shares of funds in any of the Columbia Mutual Funds during the Class Period or any market-timing, late-trading, or short-term or excessive trading in any of the Columbia Mutual Funds during the Class Period, including any claims that the Security Brokerage Released Parties allowed, assisted, cleared, brokered, financed, provided the means for, subjected investors to or otherwise facilitated or engaged in market-timing, late-trading, or short-term or excessive trading and including, without limitation, all claims that were alleged in the Class Complaint and the Fund Derivative Complaint and all claims that could have been brought against the Security Brokerage Released Parties, individually or on behalf of a class, concerning in any respect, directly or indirectly, the purchase, sale or retention of shares of funds in any of the Columbia Mutual Funds during the Class Period or any market-timing, late-trading, or short-term or excessive trading in any of the Columbia Mutual Funds during the Class Period.
In the settlement with the Canary Defendants:
“Canary Released Parties” means Canary Capital Partners, LLC; Canary Capital Partners, Ltd.; Canary Investment Management, LLC; and Edward Stern and their respective Related Parties (“Related Parties” means (a) with respect to natural persons, their past or present agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers, executors and administrators; (b) with respect to legal entities other than natural persons, their past and present, parents, subsidiaries, general partners, limited partners, officers, directors, trustees, members, employees, agents, servants, attorneys, accountants, insurers, co-insurers and re-insurers; and (c) the predecessors, successors, heirs and assigns of the foregoing).
“Released Claims” means any and all claims against the Canary Released Parties, whether direct, derivative or brought in any other capacity, whether under federal or state law, whether known or unknown (including “Unknown Claims”), whether suspected or unsuspected, whether accrued or unaccrued, concerning in any respect, directly or indirectly, market-timing, late-trading, or short-term or excessive trading in any of the Columbia Mutual Funds during the Class Period, including any claims that the Canary Released Parties allowed, assisted, cleared, brokered, financed, provided the means for, subjected investors to or otherwise facilitated market-timing, late-trading, or short-term or excessive trading and including, without limitation, all claims that were alleged in the Class Complaint and the Fund Derivative Complaint and all claims that could have been brought against the Canary Released Parties concerning in any respect, directly or indirectly, market-timing, late-trading, or short-term or excessive trading in any of the Columbia Mutual Funds during the Class Period.

[1]           “Columbia Trusts and Registrants” means the Columbia Acorn Trust, each of the registered investment companies referred to collectively as the Columbia Funds trusts, and all other registered investment companies using or formerly using the name Columbia whose shares were sold to the public during the Class Period, including, without limitation: Columbia Acorn Trust, Columbia Funds Trust I, Columbia Funds Trust II, Columbia Funds Trust III, Columbia Funds Trust IV, Columbia Funds Trust V, Columbia Funds Trust VI, Columbia Funds Trust VII, Columbia Funds Trust VIII, Columbia Funds Trust XI, Columbia High Yield Fund, Inc., Columbia International Stock Fund, Inc., Columbia Mid Cap Growth Fund, Inc., and Columbia Liberty Variable Investment Trust.
[2]           “Columbia Settling Trustees” means Margaret M. Eisen, Leo A. Guthart, Jerome Kahn, Jr., Steven Kaplan, David C. Kleinman, Allan B. Muchin, Robert E. Nason, John A. Wing, Charles P. McQuaid, Ralph Wanger, Douglas A. Hacker, Janet Langford Kelly, Richard W. Lowry, Charles R. Nelson, John J. Neuhauser, Patrick J. Simpson, Thomas E. Stitzel, Thomas C. Theobald, Anne-Lee Verville, Richard L. Woolworth, and William E. Mayer.

15. How Do I Exclude Myself from the Settlements?

Answer:

To exclude yourself from the Settlements, you must send a letter by mail stating that you want to be excluded from the Settlements in the In re Mutual Funds Investment Litigation – Columbia Sub-Track, 1:04-MD-15863. You must include your name, address, telephone number, and signature. You must also include information or documents concerning your holding(s) of shares in the Class Funds during the Class Period or a statement attesting to the fact that you held or purchased shares in one or more of the Class Funds during the Class Period. You must mail your exclusion request so that it is received no later than September 21, 2010 to:

In re Mutual Funds Investment Litigation – Columbia Sub-Track
c/o Rust Consulting, Inc.
Settlement Administrator
P.O. Box 2338
Faribault, MN  55021-9038 

Please keep a copy of everything you send by mail, in case it is lost or destroyed during shipping.

You cannot exclude yourself over the phone or by e-mail. If you ask to be excluded from the Settlements, you will not be eligible to receive any payment from the Class Settlement Funds, and you cannot object to the Settlements. You will not be legally bound by anything that happens in this lawsuit and you will be able to pursue the claims that are being released in these Settlements.
Settling Defendants may withdraw from and terminate their respective Settlements if certain threshold levels of investors who would otherwise be entitled to participate as members of the Class timely and validly request exclusion from the Class.

16. If I Do Not Exclude Myself, Can I Sue the Settling Defendants for the Same Thing Later?

Answer:
Unless you exclude yourself, you give up any right to sue the Settling Defendants or the other Released Parties for the claims being released by these Settlements. If you have a pending lawsuit or arbitration relating to the claims being released in the Actions against any of the Settling Defendants, speak to your lawyer in that case immediately. Remember, the exclusion deadline is September 21, 2010.

17. Can I exclude myself from the Derivative Action?

Answer:
Because the Derivative Action was brought on behalf of the Columbia Mutual Funds, you cannot exclude yourself from the settlement of the Derivative Action. As discussed below in Question 23, current shareholders of the Columbia Mutual Funds, or their successor funds, may object to the Settlements of the Derivative Action.
You may receive a benefit of the Derivative Action if you are a current holder of shares in one or more of the Columbia Mutual Funds or their successor funds.

18. If I Exclude Myself, Can I Receive a Payment from These Settlements?

Answer:
If you exclude yourself, you will not be eligible to receive a payment from these Settlement and please do not send in a Proof of Claim. But, you may sue, continue to sue, or be part of a different lawsuit or arbitration asserting the claims being released in these Settlements against the Settling Defendants or the other Released Parties.

19. Do I Have a Lawyer in This Case?

Answer:
The Court appointed the law firm of Milberg LLP (formerly, Milberg Weiss Bershad & Schulman LLP) as lead class counsel to represent the Class. These lawyers are called Lead Class Counsel. The Court also appointed the law firm of Wolf Haldenstein Adler Freeman & Herz, LLP as lead fund derivative counsel and Tydings & Rosenberg LLP as Plaintiffs’ Administrative Chair and Liaison Counsel. You will not be individually charged for the services of these lawyers beyond your pro rata share of any attorneys’ fees and expenses awarded by the Court that will be paid from the Settlement Funds. If you want to be represented by your own lawyer, you may hire one at your own expense. You do not, however, need to retain a lawyer to exclude yourself from the Class or to object to the Settlements.

20. How Will the Lawyers Be Paid?

Answer:
Lead Class Counsel and Lead Fund Derivative Counsel will jointly apply to the Court for attorneys’ fees not to exceed 20% of the Gross Settlement Funds. Plaintiffs’ Counsel will also apply to the Court for reimbursement of their litigation expenses paid or incurred in connection with the commencement, prosecution and resolution of the Actions in an amount not to exceed $550,000, to be paid from the Gross Settlement Funds. In addition, Court-appointed Plaintiffs’ Administrative Chair and Liaison Counsel will apply for an award of attorneys’ fees and expenses of an additional 1.25% of the Gross Settlement Funds for its efforts on behalf of plaintiffs. Such sums as may be approved by the Court will be paid from the Gross Settlement Funds. Class Members are not personally liable for any such fees or expenses.
The attorneys’ fees and expenses requested will be the only payments to Plaintiffs’ Counsel for their efforts in achieving these Settlements and for their risk in undertaking this representation on a wholly contingent basis and advancing the money necessary to pursue the Actions. To date, Plaintiffs’ Counsel have not been paid for their services or for their substantial litigation expenses. The fees requested will compensate Plaintiffs’ Counsel for their work in achieving the Settlements and Plaintiffs’ Counsel believe that it is well within the range of fees awarded to counsel under similar circumstances in other cases of this type. The Court has discretion, however, to award less than this amount.

21. How Do I Tell the Court that I Do Not Like the Settlements?

Answer:
If you are a Class Member, you can object to the Settlements if you do not like any part of them, the Plan of Allocation, or the application for attorneys’ fees and litigation expenses. To object, you must send a letter saying that you object to the Settlements in the In re Mutual Funds Investment Litigation – Columbia Sub-Track, 1:04-MD-15863, and the reasons why you object to the Settlements. Be sure to include your name, address, telephone number and signature. You must also include information or documents concerning your holding(s) of shares in the Class Funds during the Class Period or a statement attesting to the fact that you held or purchased shares in one or more of the Class Funds during the Class Period. You must file any objection with the Clerk’s Office at the United States District Court for the District of Maryland at the address set forth below on or before September 21, 2010. You must also serve any objection on Lead Class Counsel at the address set forth below, so that the objection is received by September 21, 2010:  

 

COURT
COUNSEL FOR PLAINTIFFS
Clerk of the Court
United States District Court
District of Maryland
101 W. Lombard Street
Baltimore, MD 21201
Lead Class Counsel:
Clifford S. Goodstein, Esq.
MILBERG LLP
One Penn Plaza
New York, NY 10119-0165

22. What is the Difference Between Objecting and Excluding?

Answer:
Objecting means telling the Court that you do not like something about the Settlements, the Plan of Allocation, or the application for attorneys’ fees and litigation expenses, and want the Court to disapprove the Settlements or modify them in some way. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Settlements. If you exclude yourself, you have no basis to object because the case no longer affects you.

23. How Can I Object to Settlements of the Derivative Action?

Answer:
If you are a current shareholder of one of the Columbia Mutual Funds, or a successor fund of one of the Columbia Mutual Funds, and will continue to own shares in one of the Columbia Mutual Funds through the date of the Settlement Hearing (as defined below), you also have the right to object to the Settlements of the Derivative Action, the proposed Plan of Allocation, and the requests for attorneys’ fees and expenses with respect to the Derivative Action. To object, you must send a letter saying that you object to one or more of the Settlements in the In re Mutual Funds Investment Litigation – Columbia Sub-Track, 1:04-MD-15863, and the reasons why you object to the Settlements. Be sure to include your name, address, telephone number and signature. You must also include information concerning your current holdings of shares in the Columbia Mutual Funds. Any such objections must be filed with the Court and Lead Class Counsel as listed above in Question 21 such that they are received no later than September 21, 2010.

24. When and Where Will the Court Decide Whether to Approve the Settlements?

Answer:
The Court will hold a fairness hearing at 10:00 a.m., on Thursday-Friday, October 21-22, 2010, at the United States District Court for the District of Maryland, 101 W. Lombard Street, Baltimore, MD 21201 (the “Settlement Hearing”). At this hearing, the Court will consider whether the Settlements and the Plan of Allocation are fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court may listen to people who have requested in writing by September 21, 2010 to speak at the hearing. The Court may also consider Lead Counsel’s application for attorneys’ fees and reimbursement of expenses.

25. Do I Have to Come to the Settlement Hearing?

Answer:
Lead Counsel will answer any questions Judge Motz may have.  But, you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mailed your written objection so that it is received on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not required.

26. May I Speak at the Settlement Hearing?

Answer:
Yes, but you must first ask the Court for permission to speak at the Settlement Hearing. To do so, you must send a letter stating your intention to appear in the In re Mutual Funds Investment Litigation – Columbia Sub-Track, 1:04-MD-15863. Be sure to include your name, address, telephone number, signature, and also include information or documents concerning your holdings of shares in the Class Funds during the Class Period or a statement attesting to the fact that you held or purchased shares in one or more of the Class Funds during the Class Period. Your notice of intention to appear must be received no later than September 21, 2010, and be sent to the Clerk of the Court and Lead Class Counsel at the addresses listed in Question 21. You cannot speak at the hearing if you exclude yourself from the Settlements.

27. What Happens if I Do Nothing at All?

Answer:

If you held shares in Columbia Mutual Funds directly through Columbia Management and if you do nothing, and you are eligible to receive a distribution from the settlement you will receive a check from the Claims Administrator.  But, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit or any other legal or arbitral proceeding against the Settling Defendants or the Released Parties about the same claims being released in these Settlements.

If you held shares in Columbia Mutual Funds through brokers or other intermediaries and if you do nothing you will receive no money from these Settlements but nonetheless will be bound by their terms.  But, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit or any other legal or arbitral proceeding against the Settling Defendants or the Released Parties about the same claims being released in these Settlements.

28. Are There More Details About the Settlements?

Answer:
This Long-Form Notice summarizes the proposed Settlements.  More details can be found in the stipulations with the Settling Defendants.  You can obtain copies of the Stipulations or more information about the Settlements available on this site in "Important Case Documents" or by writing to either Lead Class Counsel or Lead Fund Derivative Counsel. You can also obtain copies of the Stipulations and other papers filed in the Actions from the Clerk’s office at the United States District Court for the District of Maryland, 101 W. Lombard Street, Baltimore, MD 21201, during regular business hours. If you have other questions, you may contact the Settlement Administrator, Lead Class Counsel or Lead Fund Derivative Counsel.

29. If I do not have records that show my shareholding information during the Class Period, what can I do?

Answer:

If you are a direct shareholder, meaning you held shares in Columbia Mutual Funds directly through Columbia including through Columbia’s transfer agent, Columbia Funds Services, Inc. you DO NOT need to submit a Proof of Claim. 

If you are having difficulty providing documentation showing your relevant mutual fund holdings, please consider the following:

· Review your historical, financial records such as hard copy account statements, electronic statements, tax returns or schedules, or any other records you may have showing your mutual fund holdings during the class period.

· If you cannot locate documentation within your personal records, and you held mutual fund shares through a brokerage house or other intermediary, contact your broker, custodian, financial advisor, etc. and request copies of your financial statements during the class period.

· If you cannot locate or obtain any documentation showing your mutual fund holdings during the class period, submit a "Proof of Claim Form" with the most recent statement or documentation showing that you held shares in the eligible mutual funds and/or a written schedule of what you believe your holdings were in the eligible mutual funds during the class period. If you are unsure of what your mutual fund holdings were, still fill out the Proof of Claim Form and provide as much information as possible. Also provide a written and signed statement explaining that you are unable to provide all necessary documentation and that the Proof of Claim Form was accurately prepared to the best of your knowledge.

If you have questions, please contact the Claims Administrator at 1-877-690-7105 or via email at: info@columbiamutualfundlitigation.com