Notes to Financial Statements
compensatory damages and rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser
pursuant to such contracts.
Following October 2, 2003, 43 additional lawsuits making factual allegations generally similar to those in the Hindo Complaint
were filed in various federal and state courts against the Adviser and certain other defendants. On September 29, 2004, plaintiffs
filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative
claims; derivative claims brought on behalf of Alliance Holding; and claims brought under ERISA by participants in the Profit
Sharing Plan for Employees of the Adviser. All four complaints include substantially identical factual allegations, which appear
to be based in large part on the Order of the SEC dated December 18, 2003 as amended and restated January 15, 2004 (“SEC
Order”) and the New York State Attorney General Assurance of Discontinuance dated September 1, 2004 (“NYAG Order”).
On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative
claims, and ERISA claims entered into a confidential memorandum of understanding containing their agreement to settle these
claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date.
The settlement amount ($30 million), which the Adviser previously accrued and disclosed, has been disbursed. The derivative
claims brought on behalf of Alliance Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.
It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of
the AllianceBernstein Mutual Funds’ shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may
require the AllianceBernstein Mutual Funds to sell investments held by those funds to pr