According to the Company’s Form 10-Q for the quarterly period ended June 30, 2001, on April 24, 2001, the lead plaintiffs dismissed their appeal to the Eighth Circuit Court and on May 30, 2001, the Eighth Circuit Court issued an order dismissing the plaintiffs' appeal.
As summarized by the same SEC filing, on January 11, 2000, the plaintiffs amended their complaint, which superseded all other complaints. The amended complaint named the Company and one of its officer/directors as defendants. The Company filed a motion to dismiss this amended consolidated complaint. On June 29, 2000, the Court issued a Memorandum Opinion and Order (the "Order") dismissing most of the allegations in the consolidated complaint. As to the remaining allegations in the consolidated complaint, following the Order, on July 12, 2000, the Company filed a motion for partial reconsideration to dismiss the remaining allegations in the consolidated complaint. The lead plaintiffs filed a response to the Company’s partial reconsideration motion on July 24, 2000 and the Company filed a reply motion to the response by the lead plaintiffs on July 26, 2000. On November 27, 2000, the Court granted the Company’s motion for partial reconsideration and dismissed all of the remaining allegations in the complaint. The lead plaintiffs filed a motion for reconsideration on December 11, 2000. The Company filed a response to the lead plaintiffs' motion for reconsideration on December 20, 2000. On January 9, 2001, the Court rejected the lead plaintiffs' request for reconsideration resulting in the entire consolidated complaint being dismissed by the Court. On February 9, 2001, the lead plaintiffs appealed the dismissal of the consolidated complaint by the Court to the Eighth Circuit Court of Appeals (the "Eighth Circuit Court") in St. Louis, Missouri.
The original complaint alleges that StaffMark and certain of its officers and directors violated the federal securities laws by issuing false statements about StaffMark's business which caused its stock price to trade at artificially inflated prices. Specifically, the Complaint alleges that, on February 24, 1999, all levels of senior management of StaffMark stated that they were "confiden[t] about operations" and that, while December 98 and early January 99 business had been slow, StaffMark's business was ramping up "as fast or faster than expected." However, the Complaint alleges that, just five days later, StaffMark revealed that its revenues from its key Intellimark division had shown 0% growth in January and 4-5% growth in February, both well under budget, and that as a result, StaffMark's earnings for the first quarter of 1999 and Year 1999 would fall dramatically below expectations.
The Complaint further alleges that these disclosures caused StaffMark common stock to collapse in price and that -- just one month prior to these revelations -- StaffMark's largest shareholder sold 250,000 StaffMark shares for $4 million. The Complaint also alleges that, just three months before StaffMark collapsed in price, StaffMark used $140 million worth of its artificially inflated stock as a currency to acquire Robert Walters plc, a European business. At the same time, StaffMark's CEO had stated that StaffMark was "undervalued."