According to the firm's 10-K dated 4/24/2000, on May 18, 1998, the District Court entered an order consolidating the securities class action litigation into a single action entitled in Re PETsMART, Inc. Securities Litigation, CIV-98-20-PHX-ROS (JBM), amended complaint in the District Court. The Company and the individual defendants filed a motion to dismiss the consolidated amended complaint, and on June 3, 1999, the Court entered an order granting the motion to dismiss. The Plaintiffs filed a notice of appeal, but they subsequently stipulated to dismiss their appeal. Accordingly, the action has been fully and finally resolved.
The original complaint alleged that defendants violated the federal securities laws (Sections 10(b) and 20(a) of the Securities Exchange Act of 1934) by misrepresenting or failing to disclose material information about PETsMART's financial results. The complaint alleged that defendants issued false and misleading press releases and financial statements for 1996 and 1997 and improperly deferred the write down of its obsolete preventive flea and tick inventory. As a result of defendants' false and misleading statements and material omissions, the price of PETsMART's stock was substantially artificially inflated during the Class Period, such that persons who purchased common stock during the Class Period were damaged by overpaying for the stock.