Legal Notice: Compact Disc Minimum Price Litigation

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If You Purchased Prerecorded Music on Compact Discs, Cassettes or Vinyl Albums from January 1, 1995 through December 22, 2000 - Please Read This Legal Notice

This notice is to inform you of the proposed Settlements of lawsuits brought by the Attorney General of 43 states, Commonwealth and Territorties and by counsel for the Plaintiff Settlement Class entitled In re: Compact Disc Minimum Advertised Price Antitrust Litigation. These lawsuits, which are currently pending in the United States District Court for the District of Maine, relate to the retail pricing of prerecorded music compact discs, cassettes or vinyl albums ("Music Products").

Who is Involved?

You are a member of the Settlement Group and your rights against Defendants are affected if you are a person (or entity) in the United States and its Territories and Posessions who purchased prerecorded Music Products consisting of compact discs, cassettes and vinyl albums from one or more retailers during the period of January 1, 1995 through December 22, 2000.

Who are the Defendants?

The Distributor Defendants are: Capitol Records, Inc. d/b/a EMI Music Distribution, Virgin Records America, Inc., and Priority Records LLC; Time Warner, Inc., Warner-Elektra-Atlantic Corp., WEA, Inc., Warner Music Group, Inc., Warner Bros. Records, Inc., Atlantic Recording Corporation, Elektra Entertainment Group, Inc., and Rhino Entertainment Company; Universal Music & Video Distribution Corporation, Universal Music Group, Inc., and UMG Recordings, Inc.; Bertlesmann Music Group, Inc. and BMG Music; and Sony Music Entertainment Inc. The Retailer Defendants are: MTS, Inc. d/b/a Tower Records, Musicland Stores Corp. and Trans World Entertainment Corp.

What is the Litigation About?

Plaintiffs allege that the Defendants conspired to illegaly raise the prices of prerecorded Music Products by implementing Minimum Advertised Price policies, in violation of State and Federal laws. All Defendants deny all claims of wrongdoing asserted by the Plaintiffs.

What are the Terms of the Settlement?

The Defendants have agreed to pay a combination of cash and non-cash consideration. Defendants' combined cash payments total $67,375,000. In addition, Distributor Defendants will provide $75,700,000 worth of prerecorded music compact discs.

Cash Distribution

The cash paid by the Defendants, after payment of attorneys' fees, litigation and Settlement administration costs, shall be distributed to consumers who purchased Music Products. The number of claims filed will determine the actual amount of the individual refund but will not exceed $20.00 per claimant. If the number of claims filed would result in refunds of less than $5.00 per claimant, there will be no cash distribution to individual consumers. Rather, the cash portion of the Settlement shall be distributed to not-for-profit, charitable, governmental or public entities to be used for music-related purposes or programs.

Non-Cash Consideration

The compact discs will be distributed in each State or Territory to not-for-profit, charitable, governmental or public entities to be used for music-related purposes or programs reasonably targeted to benefit a substantial number of persons who purchased prerecorded music compact discs, cassettes or vinyl albums from one or more retailers. The amount of product each State receives will be in proportion to that State's percentage of total population of the United States and its Territories and Posessions.
All Defendants have also agreed to various injunctive provisions relation to the adotoption and implementation of certain tupes of retail advertising and pricing policies.

What are my Legal Rights?

How to Remain in the Settlement Group
If you are in the Settlement Group, you do not need to take action to remain a member, although to share in the Settlement Fund you must file a Claim Form as discussed below. If the Court approves the proposed Settlement you will receive the benefits of the proposed Settlement and you will be bound by all orders and judgements of the Court and your claims against the Defendants for the conduct alleged in these actions will be resolved and released.

How to File a Claim
If you wish to file a claim you must request and complete a Claim Form by calling the toll-free number or writing the Claims Administrator. Or, you may file a claim online (see below). Claim Forms must be signed and postmarked no later than March 3, 2003.

How to Not Participate in the Settlement Group
If you do not wish to be a member of the Settlement Group, you may exclude yourself by writing the Counsel as outlined in the Notice of Pendency (see below). Your request myst be postmarked no later than March 3, 2003.

The Court will hold a Fairness Hearing to determine if the proposed Settlement is fair, reasonable and adequate on May 22, 2003 at 10:00 am in Courtroom 2, United States Courthouse, 156 Federal Street, Portland, Maine 04101. If you remain a member of the Settlement Group you or your counsel have the right to appear before the Court and object to the Settlement. However, you must file a Notice of Intention to Appear and Object as outlined in the Notice of Pendency. Objections must be filed by March 3, 2003.

For Information on the proposed Settlement, your rights and a copy of the Notice of Pendency and Claim Form:


Visit: www.MusicCDSettlement.com
Call: 1-877-347-4782

or Write:

CD Claims Administrator
P.O. Box 1643
Fiarbault, MN 55021-1643


Reproduced from Car and Driver, February 2003 issue, page 121.