Sub-Item 77E:  Litigation
PBHG Funds (now known as Old Mutual Funds II) and PBHG Fund
Distributors (now known as Old Mutual Investment Partners) have been
named as defendants in a Class Action Suit ("Class Action Suit") and a
separate Derivative Suit ("Derivative Suit") (together the "Civil
Litigation"). The Civil Litigation consolidates and coordinates a number
of individual class action suits and derivative suits based on similar
claims, which were previously filed against PBHG Funds and PBHG
Fund Distributors in other jurisdictions, and were transferred to the U.S.
District Court for the District of Maryland. Consolidated complaints in
the Class Action and Derivative Suits were filed in the Civil Litigation
on September 29, 2004 (MDL 1586).
The Civil Litigation and the previously filed suits are primarily based
upon allegations that the defendants engaged in or facilitated market
timing of PBHG Funds, and also made selective disclosure of
confidential portfolio information to certain defendants and other parties.
The Civil Litigation alleges a variety of theories for recovery, including
but not limited to: (i) violations of various provisions of the Federal
securities laws; (ii) breaches of fiduciary duty; and (iii) false or
misleading prospectus disclosure. The Civil Litigation requests
compensatory and punitive damages. In addition, the Derivative Suit
requests the removal of each of the Trustees, the removal of PBHG Fund
Distributors as distributor, rescission of the management and other
contracts between PBHG Funds and the defendants, and rescission of
PBHG Funds' 12b-1 Plan.