According the Company’s FORM 10-Q For The Quarterly Period Ended July 4, 1998, on August 10, 1998, the Illinois court entered an order and final judgment approving the securities class action settlement. The entry of this final judgment satisfied the condition to the court approved settlement of the shareholder derivative actions.
As reported by an earlier SEC filing, specifically the Company’s FORM 10-Q For The Quarterly Period Ended April 4, 1998, on October 9, 1997, the Company reached an agreement in principle to settle several consolidated securities class action lawsuits against the Company and one of its officers in the United States District Court for the Northern District of Illinois. The amended consolidated complaint alleges violations of the Securities Exchange Act of 1934 for failure to disclose the bankruptcy collection practices described above in periodic filings with the Securities and Exchange Commission prior to April 10, 1997. The settlement agreement is subject to court approval at a hearing which has been set for August 6, 1998.
The original complaint charged Sears and certain of its directors and officers with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5 for, among other things, recklessly signing off on Sears' financial statements during the Class period when they knew that Sears' earnings were materially overstated because they included payments by Sears' bankrupt credit card customers who had signed debt reaffirmations which Sears had failed to file with bankruptcy courts throughout the United States in violation of federal bankruptcy law.