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Fremont ERISA Settlement

www.FremontERISASettlement.com

Welcome to the Fremont ERISA Settlement website. This website is designed to keep Class Members informed regarding the ERISA class action Settlement in In re Fremont General Corporation Litigation. While the District Court has approved the Notice of Class Action Settlement and Fairness Hearing and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Class Counsel and has not been approved by the Court.

 The Settlement is now final. The distribution of the Net Settlement Fund is scheduled to take place in June. The Settlement Administrator estimates that checks will be sent to Class Members on June 5, 2012.

Background

The Consolidated Complaint was filed in the United States District Court for the Central District of California on October 25, 2007. This litigation is on behalf of Plaintiffs and a Class of all persons who were participants in or beneficiaries of the Fremont General Corporation and Affiliated Companies Investment Incentive Plan, and the Fremont General Corporation Employee Stock Ownership Plan (collectively the "Plans"), between January 1, 2005, and December 31, 2008 (the "Class Period") and whose accounts included investments in Fremont General Corporation ("Fremont") common stock.

In the Consolidated Complaint, Plaintiffs allege that during the Class Period, Defendants breached their fiduciary duties to Plaintiffs and the Class by:

  • failing to prudently and loyally manage the Plans' investment in Fremont stock;
  • failing to properly monitor the performance of their fiduciary appointees and remove and replace those whose performance was inadequate;
  • failing to provide complete and accurate information to the Class regarding the soundness of Fremont stock and the prudence of investing and holding retirement contributions in Fremont equity; and
  • failing to prevent breaches by other fiduciaries of their duties of prudent and loyal management, complete and accurate communications, and adequate monitoring.

The Settlement Class

On August 8, 2011, the Honorable Jacqueline Hong-Ngoc Nguyen granted final approval of the Stipulation and Agreement of Settlement - ERISA Class Action and certified, for settlement purposes only, a non-opt-out Class consisting of the following persons:

All persons, other than Defendants, who were participants in or beneficiaries of the Plans at any time between January 1, 2005 and December 31, 2008, whose accounts included investments in Fremont stock.

The Settlement

The Settlement provides for a payment of $21 million, net of expenses described in the Stipulation and Agreement of Settlement, for the benefit of the Class.

The Court did not decide in favor of either Plaintiffs or Defendants. Instead, the Parties to the litigation entered into extensive negotiations and executed the Stipulation and Agreement on March 22, 2011. Both sides agreed to the Settlement to ensure a timely and fair resolution of Plaintiffs' claims and avoid the cost and risk of further litigation and a trial.

The Court held a hearing to evaluate the fairness and adequacy of the Settlement on August 8, 2011. At the hearing the Court considered Plaintiffs' requests for final approval of the Settlement, for approval of a proposed plan of allocation, for an award of attorneys' fees and expenses, and for case contribution awards to Named Plaintiffs. The Court found that the Settlement is fair, reasonable, and adequate. The Court also found that the request for attorneys' fees and expenses was fair and reasonable and awarded Named Plaintiffs case contribution awards.

Settlement FAQ:

Q:  How do I know whether I am part of the Settlement Class?

The Settlement Class consists of all persons, other than Defendants, who were participants in or beneficiaries of the Plans at any time between January 1, 2005 and December 31, 2008, whose accounts included investments in Fremont stock. If you received a Notice of Class Action Settlement and Fairness Hearing, it is because the Plans' records show that you, or someone who designated you as a retirement plan beneficiary, participated in one or both of the Plans and had Plan investments in Fremont stock.

If you are a member of the Settlement Class, your share of the Class Settlement Amount, if any, will be determined by the Court-approved Plan of Allocation, which is described below.

Q:  How can I receive a distribution?

You do not need to file a claim. The Settlement Administrator has calculated each Class Member's proportional share of the Settlement. If you are eligible to receive a portion of the Net Settlement Fund, you will receive a check for your share and the Settlement Administrator will send you a Form 1099-MISC at a later date. You should consult with your own tax advisor about the tax treatment of your payment prior to depositing the check.

Q:  How much will I receive?

The Settlement payment is a compromise; accordingly it does not compensate Plan participants for 100% of their claimed losses. The Settlement Administrator has performed the calculations to determine each Class Member's pro rata share of the Settlement. As the Settlement Administrator had access to all available records, you do not need to be concerned if you no longer have your Plan account statements. The Court approved a detailed Plan of Allocation, a copy of which is available on this website.

In general terms the Plan of Allocation provided that each Class Member's share of the Net Settlement Fund was to be calculated as follows:

Each member of the Class will be assigned an "Alleged Net Loss Percentage," showing the percentage of his or her alleged net loss in relation to all other Class Members' alleged net losses. Each Class Member's share of the Net Settlement Fund will be equal to the Net Settlement Fund, less the Plan expenses associated with implementing the Plan of Allocation, multiplied by his or her Alleged Net Loss Percentage.

Q:  When can I expect to receive my payment?

The Net Settlement Fund was distributed on June 1, 2012.

Q. How can I update my address information?

Please contact the Settlement Administrator toll-free at 1-800-952-0581, or email Class Counsel at info@FremontERISASettlement.com.  You may also send a letter with your corrected address information to the Settlement Administrator at:  Fremont ERISA Litigation Settlement, Settlement Administrator, c/o A.B. Data Ltd., PO Box 170500, Milwaukee, WI 53217-8042.

This website will be updated when additional information becomes available.

Please do not contact the Court, Fremont, or any of Fremont's subsidiaries or successors. They are not in a position to provide you with information about the Settlement.

If you have any questions about the Fremont General Corporation ERISA litigation Settlement, please send an email to info@FremontERISASettlement.com. This email will be directed to the individuals handling the Settlement. Class Counsel have also set up a toll free number 1 (800) 952-0581, if you prefer to call with your questions.

Document Links
  -Final Order and Judgment
  -Order Granting Plaintiffs' Motion for Award of Attorneys' Fees, Expenses, and Case Contribution Awards
  -Plaintiffs' Reply in Support of Plaintiffs' Motions for Final Approval of Class Action Settlement and Attorneys' Fees
  -Declaration of Derek W. Loeser in Support of Plaintiffs' Reply
  -Memo in Support of Final Approval
  -Declaration of Derek W. Loeser in Support of Motion for Final Approval
  -Affidavit of Anya Verkhovskaya re. Class Notice
  -Declaration of Hon. Daniel H. Weinstein (Ret.) in Support of Motion for Final Approval
  -Memo in Support of Request for Attorneys' Fees, Expenses, and Case Contribution Awards
  -Declaration of Derek W. Loeser in Support of Motion for Attorneys' Fees, Expenses, and Case Contribution Awards
  -Declarations of Plaintiffs Counsel
- Memo in Support of Preliminary Approval of Settlement
-Stipulation and Agreement of Settlement
-Order Preliminarily Approving Settlement
-Notice of Class Action Settlement and Fairness Hearing
-Summary Notice
-Plan of Allocation
-Consolidated Complaint
  
  
  






















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