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Skechers USA, Inc. Summary: According to the Company’s Form 10-Q or the quarterly period ended September 30, 2005, on April 26, 2005, the court entered judgment in favor of Skechers and the individual defendants, and on May 3, 2005, plaintiffs filed an appeal with the United States Court of Appeals for the Ninth Circuit.
As summarized by the same SEC filing, in July 2003, the court in the federal securities class actions, all pending in the United States District Court for the Central District of California, ordered the cases consolidated and a consolidated complaint to be filed and served. On September 25, 2003, the plaintiffs filed a consolidated complaint entitled In re SKECHERS USA, Inc. Securities Litigation, Case No. CV-03-2094-PA in the United States District Court for the Central District of California, consolidating all of the federal securities actions above. The complaint names as defendants Skechers and certain officers and directors and alleges violations of the federal securities laws and breach of fiduciary duty on behalf of persons who purchased publicly traded securities of Skechers between April 3, 2002 and December 9, 2002. The complaint seeks compensatory damages, interest, attorneys’ fees and injunctive and equitable relief. Skechers moved to dismiss the consolidated complaint in its entirety. On May 10, 2004, the court granted Skechers’ motion to dismiss with leave for plaintiffs to amend the complaint. On August 9, 2004, plaintiffs filed a first amended consolidated complaint for violations of the federal securities laws. The allegations and relief sought were virtually identical to the original consolidated complaint. Skechers has moved to dismiss the first amended consolidated complaint and the motion was set for hearing on December 6, 2004. On March 21, 2005, the court granted the motion to dismiss the first amended consolidated complaint with leave for plaintiffs to amend one final time. On April 7, 2005, plaintiffs elected to stand on the first amended consolidated complaint and requested entry of judgment so that an appeal from the court’s ruling could be taken.
The original complaint charges that beginning in 2002, Skechers began assuming the role of distributor of its products in several international markets such as Spain, Italy, Portugal, the Benelux region, and Austria. Once unencumbered by a third party distributor, Skechers was able to increase their profit margin on sales without moving any additional inventory. Yet, this benefit was short-lived. While temporarily enjoying increased profits by reaping greater margins on sales, Skechers' overall merchandise sales ultimately began to slow and Skechers was forced to significantly reduce earnings accordingly. The market, unprepared for the temporary effect this role of distributor would have on earnings, was stunned once the Company, having recorded record revenue in the first and second quarter of 2002, began revising earnings and ultimately recorded a loss. Even more alarming, while Skechers stock was soaring as a result of the market's favorable reaction to its increased profits, the Individual Defendants, knowing the truth about the Company's long-term outlook, sold off considerable personal holdings in the Company and reaped more than $42 million profit from stock sales during the Class Period.
INDUSTRY CLASSIFICATION:
SIC Code: 3140
Sector: Consumer Cyclical
Industry: Footwear
| COMPANY/ISSUER NAME: | Skechers USA, Inc. |
| COMPANY/ISSUER TICKER: | SKX |
| COMPANY WEBSITE: | http://www.skechers.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Harvey Solomon, et al. v. Skechers USA, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Complaint For Breach Of Fiduciary Duty And Violations Of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 03/25/2003 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: Skechers USA, Inc. Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Order Granting Defendants' Motion to Dismiss the First Amended Consolidated Complaint | |||
| Type: Order | Date on the document: 03/21/2005 | ||
| Judgment of Dismissal | |||
| Type: Other | Date on the document: 04/25/2005 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 09/15/2005 | ||
| OTHER DOCUMENTS | |||
| Case Name and/or Number: | |||
| Type: | Date on the document: | ||
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