Frequently Asked Questions

BASIC INFORMATION

  1. Why did I get the Notice package?

    You or someone in your family may have purchased or otherwise acquired the publicly traded common stock of Walter Energy between April 20, 2011 and September 21, 2011, inclusive (the “Settlement Class Period”), and were damaged thereby.

    The Court directed that the Notice be sent to potential Settlement Class Members because they have a right to know about the proposed Settlement of this class action lawsuit, and to understand how the Settlement of this Action may affect their legal rights, before the Court decides whether to approve the Settlement. If the Court approves the Settlement, and after any objections and appeals are resolved, the Claims Administrator appointed by the Court will make the payments provided for in the Settlement.

    The Notice explains the lawsuit, the Settlement, Settlement Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.

    The Court in charge of the Action is the United States District Court for the Northern District of Alabama, Southern Division, and the case is known as In re Walter Energy, Inc. Securities Litigation, Master File No. 2:12-cv-00281-VEH. The case is assigned to the Honorable Virginia Emerson Hopkins. The parties representing the Settlement Class are the Government of Bermuda Contributory, and Public Service Superannuation Pension Plans and Stephen C. Beaulieu, as Trustee of the Stephen C. Beaulieu Revocable Trust – the “Lead Plaintiffs,” and the individuals they sued are Keith Calder, Walter Scheller, Neil Winkelmann, and Joseph Leonard (“Defendants”).

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  2. What is this lawsuit about?

    During the Settlement Class Period, Walter Energy was a leading producer and exporter of metallurgical coal for the global steel industry. It also produced steam coal, coal bed methane gas (natural gas), metallurgical coke, and other related products.

    The complaint alleges that Defendants made materially false and misleading statements and failed to state certain facts regarding the Company’s operating condition and financial prospects between April 20, 2011 and September 21, 2011, which is called the Settlement Class Period. Specifically, the complaint alleges that Defendants misrepresented that Walter Energy was poised to take advantage of, among other things: (1) a strong coal market based upon favorable tonnage pricing trends in the second quarter of 2011; (2) its U.S. operations’ production of high quality coal, in particular the production capabilities of its flagship number 7 mine (“Mine No. 7”) in Alabama; and (3) benefits that it would achieve through its newly-acquired and expanding Canadian operations, including the use of the Falling Creek connector road between Walter Energy’s Brule and Willow Creek coal mines in British Columbia that would allow for more efficient transport of coal to its soon-to-be expanded Willow Creek facility for processing.

    The complaint alleges that these statements were materially false and misleading because: (1) before and during the Settlement Class Period the Company’s flagship Mine No. 7 was experiencing so-called “squeeze” events and other geological and ventilation issues that caused reduced production rates and mine closures for multiple days, and resulted in material delays and production shortages; (2) the Company’s Canadian operations were experiencing production problems resulting from construction delays on the Falling Creek connector road; and (3) as a result of the foregoing production issues and delays, the Company had an outstanding commitment to ship more than 700,000 tons of coal in the second quarter of 2011 at far lower first quarter 2011 prices, precluding it from materially capturing the significantly higher second quarter 2011 coal prices, and negatively impacting the average sales prices of its coal and overall operating results for the second quarter of 2011.

    The complaint further alleges that, upon the partial public revelation of Defendants’ alleged fraud on August 4, 2011, when Walter Energy reported on the various geological, construction and other issues impacting its production volumes and ability to capture record second quarter 2011 coal prices, the price of Walter Energy common stock declined by 30%, from $110.48 per share on August 3, 2011, to close at $77.89 per share on August 4, 2011, and that the price of Walter Energy common stock declined further when the Company disclosed the full impact of its production issues on September 21, 2011, falling from $75.00 per share on September 20, 2011 to $66.25 per share on September 21, 2011, on extremely heavy trading volume. As a result of Defendants’ allegedly false and misleading statements, it is alleged that Walter Energy’s stock traded at inflated levels during the Settlement Class Period.

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  3. Why is this a class action?

    In a class action, one or more people called the plaintiff sues on behalf of people who have similar claims. All of the people with similar claims are referred to as a class or class members. One court resolves the issues for all class members, except for those who exclude themselves from the class.

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  4. Why is there a settlement?

    The Court has not decided in favor of the Defendants or of the Settlement Class. Instead, both sides agreed to the Settlement to avoid the distraction, costs, and risks of further litigation, including trial, and Lead Plaintiffs agreed to the Settlement in order to ensure that Settlement Class Members will receive compensation. Lead Plaintiffs and Lead Counsel believe the Settlement is in the best interest of all Settlement Class Members in light of the real possibility that continued litigation could result in no recovery at all.

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WHO IS AFFECTED BY THE SETTLEMENT?

If you are a Settlement Class Member, you are subject to the Settlement unless you are excluded from the Settlement Class, as set forth in FAQ 5, or you specifically request to be excluded from the Settlement Class, in accordance with the requirements set forth in FAQ 12.

  1. How do I know if I am part of the Settlement?

    The Court directed that everyone who fits the following description is a Settlement Class Member: all Persons and entities that purchased or otherwise acquired the publicly traded common stock of Walter Energy between April 20, 2011 and September 21, 2011, and were damaged thereby, except those Persons and entities that are excluded, as described below.

    Excluded from the Settlement Class are Walter Energy and the Defendants, Defendants’ immediate families, any person, firm, trust, corporation, officer, director or other individual or entity in which any current or former defendant has a controlling interest, and the legal representatives, affiliates, heirs, successors-in-interest or assigns of any such excluded party. Also excluded from the Settlement Class are those Persons who elect to exclude themselves from the Settlement Class on a timely basis in response to and in accordance with the provisions set forth in FAQ 12.

    If one of your mutual funds owns Walter Energy common stock, that alone does not make you a Settlement Class Member. You are a Settlement Class Member only if you directly purchased or acquired Walter Energy common stock during the Settlement Class Period. Contact your broker to see if you have purchased or acquired Walter Energy common stock.

    If you sold Walter Energy common stock during the Settlement Class Period, that alone does not make you a Settlement Class Member. You are a Settlement Class Member only if you purchased or acquired Walter Energy common stock, as defined above.

    PLEASE NOTE: Receipt of the Notice does not mean that you are a Settlement Class Member or that you will be entitled to receive proceeds from the Settlement. You must be a Settlement Class Member in order to be potentially eligible to receive a payment from the Settlement. If you are a Settlement Class Member and you wish to be eligible to participate in the Settlement, you are required to submit the Proof of Claim form that was distributed with the Notice, and available for download here, and the required supporting documentation as set forth therein, postmarked or submitted online no later than May 9, 2016.


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  2. What if I am still not sure if I am included?

    If you are still not sure whether you are included, you can ask for free help. You can contact your broker or the Claims Administrator at info@WalterEnergySecuritiesLitigation.com or toll-free at 1-877-276-7349, for more information. Or you can fill out and return the Proof of Claim, to see if you qualify.

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THE SETTLEMENT BENEFITS – WHAT YOU GET

  1. What does the Settlement provide?

    In exchange for the Settlement and the release of the Released Claims (defined in the Notice), as well as the dismissal of the Action, Defendants have agreed that a payment of $25 million will be made by Defendants (or on their behalf) to be divided, after taxes, fees, and expenses, among all Settlement Class Members who send in a valid Proof of Claim form.

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  2. How much will my payment be?

    At this time, it is not possible to make any determination as to how much any individual Settlement Class Member may receive from the Settlement. If you are a Settlement Class Member, your share of the Net Settlement Fund will depend on several things, including, how many Settlement Class Members submit timely and valid Proofs of Claim, the total Recognized Claims represented by the valid Proofs of Claim that Settlement Class Members send in, the number of shares of Walter Energy common stock you purchased or acquired the shares, how much you paid for the shares, when you purchased or acquired the shares, and if you sold your shares and for how much.

    By following the instructions in the Plan of Allocation, located in the Notice, you can calculate what is called your Recognized Claim. It is unlikely that you will get a payment for all of your Recognized Claim. After all Settlement Class Members have sent in their Proof of Claim forms, the payment you get will be a part of the Net Settlement Fund equal to your Recognized Claim divided by the total of everyone’s Recognized Claim.

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HOW YOU GET A PAYMENT – SUBMITTING A CLAIM FORM

  1. How can I get a payment?

    To be eligible for a payment, you must submit a valid Proof of Claim form to the Claims Administrator at:

    Walter Energy Securities Litigation
    Claims Administrator
    c/o Epiq Systems, Inc.
    P.O. Box 4153
    Portland, OR 97208-4153

    Click here to download a Proof of Claim form. Read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail or submit it online so that it is postmarked (if mailed) or received (if filed electronically) no later than May 9, 2016. Please retain all records of your transactions in Walter Energy common stock as they may be needed to document your claim.

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  2. When would I get my payment?

    It is not possible at this time to determine when the Settlement proceeds will be distributed to eligible Settlement Class Members. The Court will hold a Settlement Hearing on May 2, 2016, to decide whether to approve the Settlement. If the Court approves the Settlement after that, there might be appeals. It is always uncertain when these appeals will be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proof of Claim forms to be processed. Please be patient.

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  3. What am I giving up to get a payment or to stay in the Settlement Class?

    Unless you exclude yourself, you will remain a Settlement Class Member, and that means that, if the Settlement is approved, you will give up all “Released Claims”, including “Unknown Claims”, against the “Released Persons” (all terms defined in the Notice).

    If you remain a member of the Settlement Class, all of the Court’s orders will apply to you and legally bind you.

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EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS

If you are a Settlement Class Member and you do not want a payment from this Settlement, and you want to keep the right to sue the Defendants and the other Released Persons, on your own, about the legal issues in this case, then you must take steps to remove yourself from the Settlement Class. This is called excluding yourself – or is sometimes referred to as “opting out.”

  1. How do I get out of the proposed Settlement Class?

    You cannot exclude yourself on the phone or by email. To exclude yourself from the Settlement Class, you must mail or deliver a written request for exclusion stating that you “request exclusion from the Settlement Class in the Walter Energy Securities Litigation.” Your request for exclusion must include the date(s), price(s), and number(s) of shares of all purchases, acquisitions, and sales of Walter Energy common stock during the Settlement Class Period. In addition, you must include your name, address, telephone number, and your signature. You must submit your exclusion request so that it is received no later than March 11, 2016 to:

    Walter Energy Securities Litigation
    Claims Administrator
    c/o Epiq Systems, Inc.
    P.O. Box 4153
    Portland, OR 97208-4153

    If you ask to be excluded, you will not get any payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue the Defendants and the other Released Persons in the future.

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  2. If I do not exclude myself, can I sue the Defendants and the other Released Persons for the same thing later?

    No. If you are a Settlement Class Member, unless you exclude yourself, you give up any rights to sue the Defendants and the other Released Persons for any and all Released Claims. If you have a pending lawsuit against any of the Released Persons, speak to your lawyer in that case immediately. You must exclude yourself from this Action to continue your own lawsuit. Remember, the exclusion deadline is March 11, 2016.

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  3. If I exclude myself, can I get money from the proposed Settlement?

    No. If you exclude yourself, you may not send in a Proof of Claim to ask for any money. But, you may sue or be part of a different lawsuit against the Defendants and the other Released Persons.

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THE LAWYERS REPRESENTING YOU

  1. Do I have a lawyer in this case?

    The Court ordered that the law firms of Robbins Geller Rudman & Dowd LLP and Kessler Topaz Meltzer & Check, LLP represent the Settlement Class Members, including you. These lawyers are called Lead Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense.

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  2. How will the lawyers be paid?

    Lead Counsel will move the Court for an award of attorneys’ fees in an amount not greater than thirty-three percent (33%) of the Settlement Amount and for expenses and costs in an amount not to exceed $550,000, plus interest on such fees, costs, and expenses at the same rate earned by the Settlement Fund. In addition, the Lead Plaintiffs may seek up to $75,000 for their time and expenses incurred in representing the Settlement Class. Such sums as may be approved by the Court will be paid from the Settlement Fund.

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OBJECTING TO THE SETTLEMENT

  1. How do I tell the Court that I object to the proposed Settlement?

    If you are a Settlement Class Member, you can object to the proposed Settlement, the proposed Plan of Allocation, and/or Lead Counsel’s fee, cost, and expense application. You can write to the Court setting out your objection. The Court will consider your views. To object, you must send a signed letter saying that you object to the proposed Settlement in the Walter Energy Securities Litigation. Any objection must also include:

    1. your name, address, telephone number, and your signature;
    2. the date(s), price(s), and number(s) of shares of Walter Energy common stock that you purchased, acquired, and sold during the Settlement Class Period;
    3. a statement of your objections to the Settlement, the reasons why you object, and whether you desire to appear and be heard at the Settlement Hearing; and
    4. all documents or writings you desire the Court to consider.

    Your objection must be filed with the Court and mailed or delivered to each of the following addresses such that it is received no later than March 11, 2016:

    COURT LEAD COUNSEL DEFENDANTS’ COUNSEL
    Clerk of the Court
    United States District Court
    Northern District of Alabama
    Southern Division
    Hugo L. Black U.S. Courthouse
    1729 Fifth Avenue North
    Birmingham, AL 35203
    Andrew J. Brown
    Robbins Geller Rudman &
    Dowd LLP
    655 West Broadway
    Suite 1900
    San Diego, CA 92101

    Andrew L. Zivitz
    Johnston de F. Whitman, Jr.
    Kessler Topaz Meltzer &
    Check LLP
    280 King of Prussia Road
    Radnor, PA 19087
    George S. Wang
    Simpson Thacher & Bartlett LLP
    425 Lexington Avenue
    New York, NY 10017

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  2. What is the difference between objecting and excluding myself?

    Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can object only if you are a Settlement Class Member and stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to, and may not, object to the Settlement because the case no longer affects you.

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THE COURT’S SETTLEMENT HEARING

  1. When and where will the Court decide whether to approve the proposed Settlement?

    The Court will hold a Settlement Hearing on May 2, 2016 at 10:00 a.m., at the United States District Court for the Northern District of Alabama, Southern Division, Hugo L. Black U.S. Courthouse, 1729 Fifth Avenue North, Birmingham, AL 35203. At the hearing the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court will listen to people who have asked to speak at the hearing. The Court may also decide how much to pay to Lead Counsel and the Lead Plaintiffs. After the Settlement Hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions will take. You should be aware that the Court may change the date and time of the Settlement Hearing without another notice being sent to Settlement Class Members. If you want to attend the hearing, you should check with Lead Counsel beforehand to be sure that the date and/or time has not changed.

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  2. Do I have to come to the hearing?

    No. Lead Counsel will answer questions the Court 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 on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.

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  3. May I speak at the hearing?

    If you object to the Settlement, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include with your objection a statement saying that it is your “Notice of Intention to Appear in the Walter Energy Securities Litigation.” Persons who intend to object to the Settlement, the Plan of Allocation, and/or the application for an award of attorneys’ fees, costs, and expenses and desire to present evidence at the Settlement 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 Settlement Hearing. You cannot speak at the hearing if you exclude yourself.

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IF YOU DO NOTHING

  1. What happens if I do nothing at all?

    If you do nothing, you will get no money from this Settlement. But, unless you exclude yourself (in accordance with the procedures set forth herein), you will not be able to start a lawsuit or be part of any other lawsuit against the Released Persons about the legal issues in this case, ever again.

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GETTING MORE INFORMATION

  1. Are there more details about the Settlement?

    The Notice summarizes the proposed Settlement. More details are in the Stipulation and Agreement of Settlement dated July 15, 2015 (the “Settlement Agreement”). You can also get a copy of the Settlement Agreement and obtain answers to common questions regarding the proposed Settlement by contacting the Claims Administrator toll-free at 1-877-276-7349.

    You can also contact the Claims Administrator using the information on the Contact Us page.

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  2. How do I get more information?

    For even more detailed information concerning the matters involved in this Action, reference is made to the pleadings, to the Settlement Agreement, to the Orders entered by the Court and to the other papers filed in the Action, which may be inspected at the Office of the Clerk of the United States District Court for the Northern District of Alabama, Southern Division, Hugo L. Black U.S. Courthouse, 1729 Fifth Avenue North, Birmingham, AL 35203, during regular business hours. For a fee, all papers filed in this Action are available at www.pacer.gov.

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Important Dates

  • Class Period
    April 20, 2011 through September 21, 2011
    both dates inclusive
  • March 11, 2016.
    Deadline to Exclude yourself from the Settlement
  • March 11, 2016
    Deadline to Object to the Settlement
  • May 2, 2016 at 10:00 a.m.
    Settlement Hearing
  • May 9, 2016
    Deadline to submit a Claim Form