Frequently Asked Questions

BACKGROUND

1. What is this matter about?

On April 3, 2023, the SEC instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Chatham Asset Management, LLC and Anthony Melchiorre (collectively, the “Respondents”). In the Order, the SEC found that Chatham and Melchiorre traded on behalf of their fund clients in three high-yield debt securities issued by American Media Inc. (“AMI”), a wholly owned subsidiary of AMI Parent Holdings, LLC (“AMI Parent”). At times, from 2016 through 2018, Chatham and Melchiorre engaged in transactions in these AMI debt securities (the “AMI Bonds”) that resulted in one Chatham fund selling AMI Bonds and a different Chatham fund purchasing the same AMI Bonds, through various broker-dealers (the “Rebalancing Trades”). Chatham engaged in the Rebalancing Trades to address portfolio constraints such as industry or issuer fund concentration limits, to meet investor redemptions, and to allocate capital inflows and outflows. These trades were executed at prices Chatham and Melchiorre proposed.

Over time, the prices at which Chatham and Melchiorre traded the securities in the Rebalancing Trades increased at a significantly higher rate than the prices of similar securities. Chatham’s and Melchiorre’s trading in the AMI Bonds accounted for the vast majority of the trading in those Bonds and therefore over time had a material effect on their pricing.

Chatham and Melchiorre calculated the net asset values (“NAVs”) of their client funds’ holdings using pricing data that was based, in part, on the trading prices of the securities. As a result, during the relevant period, the NAVs of Chatham’s Clients were higher than they would have been if Chatham’s Rebalancing Trades were removed from the market for the AMI Bonds, which, in turn, resulted in higher fees being charged to the clients than would have been charged if Chatham’s Rebalancing Trades were removed from the market.

Finally, the SEC found that many of the Rebalancing Trades involved open-ended mutual funds regulated as registered investment companies (“RICs”). The SEC found that, in those cases, Chatham and Melchiorre aided and abetted and caused RICs to enter into prohibited affiliate transactions in violation of Sections 17(a)(1) and (2) of the Investment Company Act.

The SEC ordered the Respondents to pay $11,000,000.00 in disgorgement, $3,375,072.00 in prejudgment interest, and $5,000,000.00 in civil money penalties, for a total of $19,375,072.00, to the SEC. The SEC also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties, the disgorgement and interest collected (the “Fair Fund”), could be distributed to harmed investors.

The Chatham Fair Fund consists of the $19,375,072.00 paid by the Respondents. The Fair Fund has been deposited in a SEC-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund.

On April 3, 2024, the SEC issued an order appointing Heffler, Radetich & Saitta, LLP, as the Tax Administrator of the Fair Fund. On May 9, 2025, the SEC issued an order appointing Simpluris Inc. (“Simpluris”), as the Third-Party to oversee the administration and distribution of the Fair Fund.

On March 13, 2025, the SEC published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”); and on May 9, 2025, the SEC approved the Plan of Distribution, which, among other things, appointed SEC employee Allison J.P. Moon as the Fund Administrator and authorized the Fund Administrator to engage Simpluris Inc. (“Simpluris”), as the Third-Party to perform administrative tasks associated with implementing the Plan.

2. Why did I receive a Plan Notice?

You received a Plan Notice as you have been identified by the Fund Administrator as a person or entity who paid excess performance (aka incentive) fees and management fees to Chatham from January 2016, through December 2018, inclusive (the “Relevant Period”).

3. What is the Relevant Period?

The Relevant Period is from January 2016, through December 2018, inclusive.

4. How much is in the Chatham Fair Fund?

The Fair Fund consists of the $19,375,072.00 paid by the Respondents plus accrued interest.

ELIGIBILITY

5. Who is eligible for a potential payment from the Chatham Fair Fund?

You may be eligible for a payment from the Chatham Fair Fund if:

1. You paid excess performance and management fees during the Relevant Period;


2. Your Recognized Loss calculates to a distribution amount equal to or greater than the Minimum Distribution Amount of $25.00, as calculated under the Plan;


3. You are not an Excluded Party; and


4. You timely submitted a valid Certification Form.

In order to be considered for eligibility for a distribution payment from the Chatham Fair Fund, you must complete and submit a Certification Form by August 7, 2025 (the “Certification Form Deadline”).

6. Who is excluded from payment from the Chatham Fair Fund?

You are excluded from participation in the Chatham Fair Fund if you are an Excluded Party as defined in the Plan, including:

1. The Respondents (Chatham Asset Management, LLC and Anthony Melchiorre);


2. Present of former officers of Respondents or any assigns, creditors, heirs, distributees, spouses, parents, dependent children or controlled entities of any of the foregoing Persons or entities;


3. Any employee or former employee of the Respondents or any of its affiliates who has been terminated for cause or has otherwise resigned, in connection with the conduct described in the Order;


4. Any Person who has been the subject of criminal charges related to the conduct described in the Order or any related SEC action; and


5. Any purchaser or assignee of another Person’s right to obtain recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.

PLAN OF ALLOCATION

7. What is the Plan of Allocation?

The Plan of Allocation, available for review as Exhibit A of the Plan, states how the Recognized Losses and Distribution Payments will be calculated.

The Plan of Allocation is designed to compensate investors who suffered a loss by paying excess performance (aka incentive) fees and management fees to Chatham, during the Relevant Period. An Eligible Claimant is a Person who suffered a Recognized Loss as calculated by the Plan of Allocation; who submits a valid Certification Form by the Certification Form Deadline; and who is not an Excluded Party under paragraphs 14(a)-(e) of the Plan. An Eligible Claimant will be deemed a Payee and will receive a distribution payment if their Recognized Loss calculates to a distribution amount equal to or greater than $25.00.

THE CERTIFICATION PROCESS

8. What is the deadline to submit a Certification Form?

The deadline to submit a Certification Form, also referred to as the “Certification Form Deadline”, is August 7, 2025.

Certification Forms completed online must be submitted on or before 11:59 p.m. Eastern Daylight Time on August 7, 2025.

Certification Forms submitted by mail must be sent to the address provided on the Certification Form and postmarked (or if not sent by U.S. Mail, received) by August 7, 2025.

9. How do I submit a Certification Form online?

Online submissions are encouraged.

To submit a Certification Form online, go to the Submit a Certification Form page, login with the User ID and PIN provided on your paper Certification Form, and follow the provided instructions.

Certification Forms completed online must be submitted on or before 11:59 p.m. Eastern Daylight Time on August 7, 2025.

10. How do I submit a Certification Form via mail?

If you are unable to submit a Certification Form online, you may request a copy of the paper Certification Form from the Third-Party via email at info@ChathamFairFund.com or by calling 866-675-2561.

Certification Forms submitted by mail must be sent to the address provided on the Certification Form and postmarked (or if not sent by U.S. Mail, received) by August 7, 2025.

11. I think I might be eligible, but I did not receive a Plan Notice. What can I do?

Anyone who did not receive a Plan Notice but believes they should have, should contact the Third-Party by August 7, 2025, and submit documentation to support their claim along with their contact information. If the Third Party, in consultation with the SEC, determines that the claimant should have received a Plan Notice, a Plan Notice will be sent to the claimant within 30 days of receipt of their documentation. The Third-Party can be reached by email at info@ChathamFairFund.com, or by calling 866-675-2561.

DISTRIBUTION

12. Where do I find my Recognized Loss?

Your Recognized Loss is provided on the first page of your Certification Form. You can also view your Recognized Loss by going to the Submit a Certification Form page here and logging in using the User ID and PIN provided in your Certification Form. For further assistance locating your Recognized Loss, contact the Third-Party via email at info@ChathamFairFund.com or by calling 866-675-2561.

13. How do I dispute my Recognized Loss calculation?

If you wish to dispute your Recognized Loss amount, you must provide a written statement along with supporting documentation to the Third-Party by email at info@ChathamFairFund.com or by mail to Chatham Fair Fund, Third-Party, P.O. Box 25204, Santa Ana, CA 92799. The deadline to submit a dispute of your Recognized Loss amount is October 6, 2025.

14. How will I find out about the outcome of my Claim?

Within 180 days of the Plan approval, the Third-Party will send a Final Determination Notice to any Preliminary Claimant who timely submitted a written dispute, notifying the Preliminary Claimant of the Third-Party’s resolution of the dispute; and those Preliminary Claimants who have not responded to the Plan Notice, notifying the Preliminary Claimant that they have been deemed an Unresponsive Preliminary Claimant.

15. When will Distribution Payments be disbursed?

There is no current estimate for when Distribution Payments will commence. Please visit this website often to get the most up-to-date information.

ADDITIONAL INFORMATION

16. Who is the Tax Administrator?

On April 3, 2024, the SEC issued an order appointing Heffler, Radetich & Saitta, LLP, as the Tax Administrator of the Fair Fund. See the SEC’s Order: Release No. 34-99895.

17. Who is the Fund Administrator?

On May 9, 2025, the SEC issued an order appointing SEC employee Allison J.P. Moon as the Fund Administrator to oversee the administration and distribution of the Fair Fund. The SEC also approved the engagement of a third-party, Simpluris, Inc. (the “Third-Party” or “Simpluris”) to perform administrative tasks associated with implementing the Distribution Plan. See the Plan of Distribution paragraphs 29-30.

18. Where can I get additional information?

Copies of the Plan, the Notice, and other relevant documents are available for download on the Important Documents page of this website and through the SEC’s website for this matter.

If you would like to request a copy of the Plan, the Plan Notice, and/or the Certification Form, or if you have any other questions, you may contact the Third-Party via email at info@ChathamFairFund.com, or by calling 866-675-2561. The mailing address for the Third-Party is: Chatham Fair Fund, Third-Party, P.O. Box 25204, Santa Ana, CA 92799.