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Commonly Asked Questions

Why did I get the Notice?

Answer:

The Notice was sent to you pursuant to an Order of the United States District Court for the Southern District of New York (the “Court”) because you or someone in your family may have purchased or otherwise acquired Ambac Securities during the Class Period.  As a potential Class Member, you have a right to know about your options before the Court rules on the proposed settlements of this case.  Additionally, you have the right to understand how a class action lawsuit may generally affect your legal rights. 

What is a Class Action?

Answer:

A class action is a type of lawsuit in which the claims of a number of individuals are resolved together, thus providing the class members with both consistency and efficiency. Once the class is certified, the Court must resolve all issues on behalf of the class members, except for any persons who choose to exclude themselves from the class. In a class action lawsuit, the Court selects one or more people, known as class representatives, to sue on behalf of all people with similar claims, commonly known as the class or the class members.

Who are the Class Representatives in this lawsuit?

Answer:

In this Action, the Court has appointed the Public School Teachers’ Pension & Retirement Fund of Chicago, Arkansas Teacher Retirement System and Public Employees’ Retirement System of Mississippi as Lead Plaintiffs under a federal law governing lawsuits such as this one, and approved Lead Plaintiffs’ selection of the law firms of Bernstein Litowitz Berger & Grossmann LLP and Kaplan Fox & Kilsheimer LLP to serve as Lead Counsel in the Action.  Lead Plaintiffs are the Class Representatives.

Who are the Defendants?

Answer:

The Notice relates to the pendency and proposed settlements of a class action lawsuit against (i) Ambac Financial Group, Inc. (“Ambac” or the “Company”); (ii) certain present or former officers or directors of Ambac; and (iii) Citigroup Global Markets, Inc., UBS Securities LLC, Goldman, Sachs & Co., J.P. Morgan Securities Inc., HSBC Securities (USA) Inc., Merrill Lynch, Pierce, Fenner, & Smith Incorporated, and Wachovia Capital Markets, LLC, now known as Wells Fargo Securities, LLC (collectively, the “Underwriter Defendants”). Also covered by the settlements are nineteen individuals who are named in the Action or one or more related securities or derivative actions. These nineteen individuals are Michael A. Callen (“Callen”), Jill M. Considine (“Considine”), Robert J. Genader (“Genader”), W. Grant Gregory (“Gregory”), Philip B. Lassiter (“Lassiter”), Sean T. Leonard (“Leonard”), Thomas C. Theobald (“Theobald”), John W. Uhlein, III (“Uhlein”), Laura S. Unger (“Unger”), Henry D.G. Wallace (“Wallace”), David W. Wallis (“Wallis”), Gregg L. Bienstock (“Bienstock”), Kevin J. Doyle (“Doyle”), Philip Duff (“Duff”), Thomas J. Gandolfo (“Gandolfo”), Kathleen McDonough (“McDonough”), William T. McKinnon (“McKinnon”), Douglas C. Renfield-Miller (“Renfield-Miller”), and Robert G. Shoback (“Shoback”); (collectively, “Individual Defendants,” and together with Ambac, the “Ambac Defendants”). The Ambac Defendants and the Underwriter Defendants are collectively referred to as the “Settling Defendants.” Plaintiffs and the Settling Defendants are collectively referred to as the “Settling Parties.” The proposed Settlements, if approved by the Court, will settle certain claims of all persons and entities who purchased or otherwise acquired Ambac Securities from October 19, 2005, through and including July 18, 2009 (the “Class Period”).

What is the Notice about?

Answer:

The Notice explains the lawsuits, the two Settlements, your legal rights, how you might be affected, what benefits are available, who is eligible for them, how to receive them and how to exclude yourself from the Class if you wish to do so.  It also informs you of a hearing to be held by the Court to consider the fairness, reasonableness and adequacy of the proposed Settlements, the fairness and reasonableness of the proposed Plan of Allocation, and the application by Lead Counsel for attorneys’ fees and reimbursement of expenses.

Who is included in the Settlements?

Answer:

All persons or entities who purchased or otherwise acquired any securities of Ambac Financial Group, Inc. (“Ambac” or the “Company”), including Ambac equity or debt securities or options thereon, or any Structured Repackaged Asset-Backed Trust Securities, Callable Class A Certificates, Series 2007-1, STRATS(SM) Trust for Ambac Financial Group, Inc. Securities, Series 2007-1 (“STRATS”) (collectively “Ambac Securities”), during the period from October 19, 2005, through and including July 18, 2009.

What are my options?

Answer:

If you are a Class Member, you have the following options:

 

Complete a Claim Form:

To be eligible to receive money from the Settlements Funds, you must be a Class Member and timely submit a completed Proof of Claim form with supporting documents (DO NOT SEND ORIGINALS) to the Claims Administrator. Please read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it , and mail it to the Claims Administrator by first class mail, postmarked no later than October 24, 2011. The Claims Administrator needs all of the information requested in the Proof of Claim in order to determine what you may be eligible to receive. You should read the Notice and Proof of Claim carefully before submitting your Proof of Claim or determining another course of action. To download a Proof of Claim form please click the link to the left.

 

Do Nothing:

If you do nothing, you will remain in the class. By remaining in the class, you will be included in and bound by any resolution of the claims, whether favorable or unfavorable to Plaintiffs and the Class.

 

Object:

Objecting means you object to some or all of the terms of the Settlements as detailed in the Notice.  In order to object you must write to the Court and Counsel and demonstrate the objecting person's membership in the Class, including documentation reflecting the number of Ambac eligible securities purchased and sold during the Class Period.  You must also include a statement of the reasons for objection and provide your full name, address, and phone number. The written objection must be received no later than September 7, 2011.

 

Exclude Yourself:

Excluding yourself is telling the Court that you do not want to be part of the Settlements but allows you the opportunity to exercise any right you may have to sue. Your exclusion must be received no later than September 7, 2011.  For further information please refer to the the question below titled "How do I exclude myself from the Settlements?"

 

 

What is the difference between Objecting and Excluding?

Answer:

Objecting is simply telling the Court that you do not like something about the Settlements, the Plan of Allocation, and/or the application for attorneys’ fees and expenses. 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 but allows you the opportunity to exercise any right you may have to sue, continue to sue or be part of a different lawsuit against the Settling Defendants and the other Released Settling Defendant(s) Parties with respect to the Released Plaintiffs’ Claims in this case.  If you exclude yourself, you have no basis to object because the Settlements no longer affect you.

How do I exclude myself from the Settlements?

Answer:

To exclude yourself from the Class you must provide a written Request for Exclusion from the Class, addressed to:

 

Ambac Financial Group, Inc. Securities Litigation

c/o Rust Consulting, Inc.,

P.O. Box 2457

Faribault, MN 55021-9157

 

The exclusion request must be received no later than September 7, 2011.  You will not be able to exclude yourself from the Class after that date.  Each Request for Exclusion must (i) state the name and address of the person or entity requesting exclusion; (ii) state that such person or entity requests exclusion from the Class in In re Ambac Financial Group, Inc. Securities Litigation, Case No. 08-cv-00411-NRB and/or Tolin v. Ambac Financial Group, Inc. et al., Case No. 08-cv-11241-CM ; (iii) be signed by the person or entity requesting exclusion; (iv) provide a telephone number for that person or entity; and (v) provide the date(s), price(s) and number(s) of shares of all purchases, acquisitions and sales of Ambac Securities during the Class Period.  Requests for exclusion will not be valid if they are not received within the time stated above, unless the Court otherwise determines.   Keep a copy of everything you mail, in case something is lost during shipping or processing.

 

When and where will the Court decide whether to approve the Settlements?

Answer:

The Final Approval Hearing will be held on September 28, 2011 at 10:00 a.m., before the Honorable Naomi Reice Buchwald, at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, Courtroom 21A, New York, NY 10007.

What will the Court decide at the Final Approval Hearing?

Answer:

The Court will address the following:

  • Certification of the Class solely for purposes of the Settlements;
  • Are the Settlements fair, reasonable, adequate and in the best interests of the Class and should be approved by the Court;
  • Should certain claims against the Settling Defendants and the other Released Parties be dismissed with prejudice and fully and finally released by Plaintiffs and the Class;
  • Is the proposed Plan of Allocation fair and reasonable and should be approved by the Court and;
  • Should Lead Counsel’s request for an award of attorneys’ fees and reimbursement of certain litigation expenses be approved by the Court.

Do I have to come to the Final Approval Hearing?

Answer:

No. Lead Counsel will answer any questions the Court may have. But, you are welcome to attend the hearing at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as your written objection was received on time, the Court will consider it.   See page 19 of the Notice for further instructions.

How do I object to the Settlements?

Answer:

To object to the Settlements you must submit a written notice of objection, which must be received no later than September 7, 2011, with the CLERK OF THE COURT, United States District Court for the Southern District of New York, Daniel Patrick Moynihan U.S. Courthouse, Ruby J. Krajick Clerk of the Court, 500 Pearl Street, New York, New York 10007; and also served on or before September 7 to Counsel for Ambac, Lead Counsel for the Class, and Counsel for the Underwriter Defendants which are all listed on page 19 of the Notice, paragraph 102.


The notice of objection must demonstrate the objecting Person’s membership in the Class, including documentation reflecting the number of Ambac eligible securities purchased and sold during the relevant period, contain a statement of the reasons for objection, and provide your full name, address, and phone number. Only members who have submitted written notices of objection and related documentation in this manner will be entitled to be heard at the Final Approval Hearing, unless the Court orders otherwise. You can object to the Settlements without attending the Final Approval Hearing.

May I speak at the Final Approval Hearing?

Answer:

If you wish to be heard orally at the hearing in opposition to the approval of the Settlements, the Plan of Allocation, or Lead Counsel’s request for an award of attorneys’ fees and reimbursement of Litigation Expenses, and if you have filed and served a timely written objection, you also must notify counsel on or before September 7, 2011 concerning your intention to appear.  Persons who intend to object and desire to present evidence at the Final Approval Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the hearing.

What are the Ambac securities involved in this litigation?

Answer:

The Ambac Securities are:

 

Security Name

CUSIP NO.

Ambac Common Stock

023139108

Ambac DISCS

023139AF5

Ambac STRATS

784786204

Ambac 5.95% - 2103 Debentures

023139504

Ambac 5.875% - 2103 Debentures

023139603

Ambac 9.375% - 2011 Debentures

023139AA6

Ambac 5.95%-2035 Debentures

023139AE8

Ambac 7.5% - 2023 Debentures

023139AB4

Ambac 9.5% - 2021 Senior Notes & Corporate Units

023139AG3

Ambac Call Option Contracts

N/A

Ambac Put Option Contracts

N/A

How do I know if I am affected by the Settlements?

Answer:

You are a member of the Class, therefore impacted by the Settlements, if you purchased or otherwise acquired Ambac common stock, debentures, Discs, Strats, call or put option between October 19, 2005 and July 18, 2009, inclusive.  Excluded from the Class are: (a) Ambac; (b) the Defendants; (c) members of the immediate families of any Defendant; and (d) the legal representatives, heirs, successors, or assigns of any of the foregoing excluded persons or entities.

 

If you are a member of the Class, you are subject to the Settlements unless you timely request to be excluded.

What are the settling parties reasons for the Settlements?

Answer:

Plaintiffs and Lead Counsel believe that the claims asserted against the Settling Defendants have merit.  Plaintiffs and Lead Counsel recognize, however, the expense and length of continued proceedings necessary to pursue their claims against the Settling Defendants through trial and appeals, as well as the difficulties in establishing liability for allegations of fraud.  Plaintiffs and Lead Counsel have considered the uncertain outcome and trial and appellate risk in complex lawsuits like this one.    

 

In light of the amount of the Settlements and the immediacy of recovery to the Class, Plaintiffs and Lead Counsel believe that the proposed Settlements are fair, reasonable and adequate, and in the best interests of the Class.  Plaintiffs and Lead Counsel believe that the Settlements provide a substantial benefit now, namely $33 million (less the various deductions described in the Notice), as compared to the risk that the claims in the Complaint would produce a similar, smaller, or no recovery after summary judgment, trial and appeals, possibly years in the future.

 

Settling Defendants have denied and continue to deny each and all of the claims alleged by Plaintiffs in the Action.  Settling Defendants expressly denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Action.

How will the Lawyers be paid?

Answer:

Lead Counsel have not received any payment for their services in pursuing claims against Defendants on behalf of the Class, nor have Lead Counsel been reimbursed for their out-of-pocket expenses.  Before final approval of the two Settlements, Lead Counsel intend to apply to the Court for an award of attorneys’ fees from the Settlement Fund of 17% of the total Settlement Fund of $33 million, plus interest at the same rate and for the same time period as earned by the Settlement Fund.  At the same time, Lead Counsel also intend to apply for the reimbursement of certain Litigation Expenses in an amount not to exceed $1,500,000 plus interest at the same rate and for the same time period as earned by the Settlement Fund.

How much will my payment be?

Answer:

Your share of the recovery (if any) will depend upon the number of valid claims sent in by Class Members, when and for what price these Class Members purchased and/or sold their shares of eligible Ambac securities, and how many shares of eligible Ambac securities you bought.

To receive a distribution from the Settlement Fund, Class Members must complete a Claim Form and mail it and all required documentation to the Claims Administrator postmarked no later than October 24, 2011. Class Members who do not submit acceptable Claims Forms will not share in the Settlement Fund. Class Members who do not submit either a request for exclusion or an acceptable Claims Form will nevertheless be bound by the Settlements and the Judgment of the Court dismissing the claims against the Defendants.

How do I participate in the Settlements?

Answer:

If you are a member of the Class, you must submit a Proof of Claim Form and supporting documentation to establish your entitlement to share in the Settlements. To obtain a Proof of Claim form, you may click here. You may also request a Claim Form by calling the toll-free telephone number 877-497-5866. 

 

Eligibilty and potential award will not be known until all claims are received and processed.

When is the deadline to submit a claim?

Answer:

Each person wishing to participate in the distribution must timely submit a valid Proof of Claim and Release form (“Claim Form”) establishing membership in the Class, and including all required documentation, postmarked no later than October 24, 2011, to:

 

Ambac Financial Group, Inc. Securities Litigation

c/o Rust Consulting, Inc.

P.O. Box 2457

Faribault, MN 55021-9157

 

Unless the Court otherwise orders, any Class Member who fails to submit a Claim Form postmarked no later than October 24, 2011 shall be forever barred from receiving payments pursuant to the Settlements but will in all other respects remain a Class Member and be subject to the provisions of the applicable Stipulations, including the terms of any Judgments entered and releases given. 

Whom should I contact if I have any questions?

Answer:

Claims Administrator

Ambac Financial Group, Inc. Securities Litigation

c/o Rust Consulting, Inc.

P.O. Box 2457

Faribault, MN 55021-9157

 

info@ambacsecuritieslitigation.com

(877)-497-5866

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