Case Page


Case Status:    SETTLED
On or around 04/26/2006 (Date of order of final judgment)

Filing Date: May 25, 2001

According to the Orders entered on April 26, 2006, U.S. District Judge Edward F. Harrington approved attorneys’ fees and reimbursement of expenses, approved the plan of allocation, and, further, signed the Final Judgment and Order of Dismissal with Prejudice.

In a press release dated March 6, 2006, a Fairness Hearing will be held on April 26, 2006, to determine, among other things, (1) whether the proposed Settlement Fund is fair, reasonable, and adequate and should be approved, and therefore, whether the Action should be dismissed with prejudice; (2) whether the Plan of Allocation of the Net Settlement Fund should be approved; and (3) whether the application by Lead Counsel for an award of attorneys' fees and reimbursement of expenses incurred by Plaintiffs' Counsel and for an award of costs and expenses to one or more Lead Plaintiffs in prosecuting the Action should be approved. The proposed Settlement provides for the creation of a ten million five hundred thousand dollar ($10,500,000.00) Settlement Fund to be distributed to Authorized Claimants pursuant to a proposed Plan of Allocation, and the Eaton Vance Defendants' agreement to pay up to $200,000.00 of total notice and administration expenses.

As summarized by the Notice of Proposed Settlement dated January 9, 2006, following the completion of discovery, on January 18, 2005, Defendants filed motions for summary judgment, which Plaintiffs opposed. On June 8, 2005, the Court issued orders denying the motions in their entirety. The Court also issued an order setting deadlines for the filing of various pretrial submissions and motions, and set a trial date of November 28, 2005. On June 23, 2005, the Eaton Vance Defendants moved for reconsideration of the order denying their motion for summary judgment. The Court promptly denied reconsideration. As the parties were preparing for the November 28, 2005 trial of this Action, they agreed to attempt to mediate a settlement of this Action before Magistrate Judge Marianne B. Bowler of the Court. The mediation was held on September 20, 2005. Through the critical assistance of Magistrate Judge Bowler, the Parties reached an agreement-in-principle to settle this Action for the consideration set forth herein. On December 20, 2005, the parties executed a Stipulation of Settlement.

By a Memorandum and Order dated December 16, 2003, the Court granted class certification in part, certifying a class of only EV Classic investors, and only those who purchased shares of EV Classic between May 25, 1998 and March 15, 1999, inclusive, or between March 13, 2000 and March 2, 2001, inclusive, and only appointing the Lead Plaintiffs to represent the Class. By this Memorandum and Order, the Court also granted Lead Plaintiffs’ request that the class claims asserted under Section 12(a)(2) of the Securities Act be voluntarily dismissed. Plaintiffs then filed a petition with the United States Court of Appeals for the First Circuit (the “Court of Appeals”) seeking leave to take an immediate appeal of the December 16, 2003 class certification ruling. After seeking certain additional explanations from the Court, the Court of Appeals denied the petition on May 10, 2004.

On October 15, 2001, Plaintiffs filed their Consolidated Complaint. Defendants moved to dismiss the Complaint on November 30, 2001. By a Memorandum and Order dated June 11, 2002, the Court granted in part and denied in part Defendants’ motions to dismiss. The Court upheld Plaintiffs’ Securities Act claims and dismissed the Exchange Act claims. Defendants sought reconsideration of the Memorandum and Order, which motion was denied by the Court on July 31, 2002. Defendants answered the Complaint on August 12, 2002, denying the material allegations of the Complaint and asserting a number of affirmative defenses.

This is a class action on behalf of a class (the "Class") of all persons who
purchased or otherwise acquired shares ("common stock" or "shares ") of EV Classic Senior Floating - Rate Fund between March 30, 1998 and March 2, 2000 (the "Class Period"), seeking to pursue remedies under the Securities Act of 1933 (the "1933 Act") and the Securities Exchange Act of 1934 (the "1934 Act"). Specifically, during the Class Period, defendants disseminated a series of Prospectuses/Registration Statements dated March 30,1998, October 19,1998, February 22, 1999, and March 13, 2000 (the "Prospectuses") to the Class in connection with their purchase of Fund shares at a materially inflated net asset value ("NAV"), which rendered such Prospectuses materially false and misleading as stated herein.

Shares in the Fund are not publicly traded. The Fund, however, conducts quarterly repurchases of shares from shareholders and allows for daily purchases of shares. As such, the Fund is required under SEC Rules 22c-1(a) and c-3 under the Investment Company Act of 1940 ("1940 Act") to conduct share repurchases and sales at NAV. Pursuant to Section 2 of the 1940 Act and Rule 2a-4 thereunder, the Fund is obligated to compute its NAV based on market quotations for its securities where such quotations are "readily available" and value its securities based on their "fair value" where market quotations are not "readily available ." Where "fair value" is used, however, determinations as to the value of the Fund's securities must reflect what the Fund would receive on their current sale.

Despite the fact that the Trustees of the Fund were closely following the rapid development of the secondary market for senior loans and had actual knowledge thereof, they continued to direct the Fund's loan interests to be valued at a "fair value" method during the Class Period. Defendants failed to adopt and employ market pricing procedures for the Fund's senior loan interests, despite their knowledge of the existence of "readily available" market quotations, or, in the alternative, failed to determine in good faith the "fair value" of the Fund's senior loan interests, considering all indications of value in respect of a "current sale."

The Fund also disseminated annual reports to the Class for the years ended
1999 and 2000 (the "Annual Reports") that contained materially false and misleading statements regarding the nature and development of the secondary market for its senior loan interests, the risks associated with investing in the Fund, and the Fund's performance information. For example, in its 1999 annual report, the Fund stated that the development of a secondary market for senior loan interests and the Fund's corresponding adoption of "mark to market" pricing for its loan interests would yield "absolutely" "positive" results when it knew or was reckless in not knowing that the values the Fund ascribed to many of its loan interests were well in excess of their then market prices and that a shift to market pricing would deliver a swift and stinging blow to the Fund's NAV. Indeed, the Fund's NAV, which had never fallen more than a few pennies below $10 since its inception in 1995, dropped from approximately $10 in late 1999 to $9 .44 on March 30, 2001, following its gradual implementation of market pricing for up to 90% of its loan interests.


Sector: Financial
Industry: Investment Services
Headquarters: United States


Ticker Symbol:
Company Market: Privately Traded
Market Status: Privately Held

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Massachusetts
DOCKET #: 01-CV-10911
JUDGE: Hon. Edward F. Harrington
DATE FILED: 05/25/2001
CLASS PERIOD END: 03/02/2000
  1. Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ)
    220 St. Paul Street, Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ), NJ 07090
    908.928.1700 908.301.9008 ·
  2. Goodkind Labaton Rudoff & Sucharow LLP
    100 Park Avenue, Goodkind Labaton Rudoff & Sucharow LLP, NY 10017
    212.907.0700 212.818.0477 ·
  3. Shapiro Haber & Urmy LLP (Boston)
    75 State Street, Shapiro Haber & Urmy LLP (Boston), MA 02109
    617.439.3939 617.439.0134 ·
No Document Title Filing Date
COURT: D. Massachusetts
DOCKET #: 01-CV-10911
JUDGE: Hon. Edward F. Harrington
DATE FILED: 10/15/2001
CLASS PERIOD END: 03/05/2001
  1. Klafter & Olsen LLP (Washington)
    1250 Connecticut Ave., N.W. Suite 200, Klafter & Olsen LLP (Washington), DC 20036
    202.261.3553 202.261.3533 ·
  2. Labaton Sucharow & Rudoff LLP
    100 Park Avenue, 12th Floor, Labaton Sucharow & Rudoff LLP, NY 10017
    212.907.0700 212.818.0477 ·
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date