Founded in 1859, The Great Atlantic & Pacific Tea Company ("A&P" or the Company) is one of the first supermarket chains in the United States.

The original Complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 15, 2001 and May 28, 2002, thereby artificially inflating the price of A&P securities. Throughout the Class Period, as alleged in the Complaint, Defendants issued statements regarding A&P's quarterly and annual financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission ("SEC"). The Complaint alleges that these statements were materially false and misleading because, among other things, (i) the Company was employing improper accounting practices regarding the recognition of vendor allowances and the accounting of inventory in certain of its regions for fiscal year 2001 in violation of Generally Accepted Accounting Principles. As a result, the Company's operating results were materially misrepresented and overstated; and (ii) based on the foregoing, Defendants' statements concerning the prospects of A&P were lacking in a reasonable basis at all times. On May 28, 2002, the last day of the Class Period, the Company announced that it would delay the filing of its annual report with the SEC while it conducted an accounting review which will most likely result in a charge to earnings. The accounting review will focus on the appropriate timing for the recognition of vendor allowances and the accounting of inventory in certain of the Company's regions for fiscal year 2001. A&P further noted that a substantial portion of any charge the Company will take will reverse credits which were recognized prematurely as reductions of cost of merchandise sold, and that portion will therefore be recognized in periods subsequent to fiscal 2001 as reductions of cost of merchandise sold. Following this disclosure, A&P stock fell $4.03 per share, or approximately 16%, to close on May 28, 2002 at $21.070 per share.

According to the Company’s FORM 10-Q For Quarter Ended June 19, 2004, a purported securities class action Complaint was filed in the United States District Court for the District of New Jersey against the Company and certain of the Company’s officers and directors in an action captioned Brody v. The Great Atlantic & Pacific Tea Co., Inc., No. 02 CV 2674 (FSH). The Brody lawsuit and four subsequently filed related lawsuits were consolidated into a single lawsuit captioned In re The Great Atlantic & Pacific Tea Company, Inc. Securities Litigation, No. 02 CV 2674 (FSH). On December 2, 2002, Plaintiffs filed their Consolidated Amended Class Action Complaint, which alleged claims under Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act of 1934 arising out of the Company's July 5, 2002 filing of restated financial statements for fiscal 1999, fiscal 2000 and the first three quarters of fiscal 2001. The Complaint in the Class Action Lawsuit sought unspecified money damages, costs and expenses. On January 17, 2003, Defendants filed a motion seeking to dismiss the Complaint. In an Opinion & Order entered September 18, 2003, the District Court dismissed Plaintiffs' Complaint without prejudice. After declining to file a Second Amended Complaint, Plaintiffs appealed the District Court's dismissal of their Complaint to the United States Court of Appeals for the Third Circuit.

As summarized by the same SEC filing, on June 5, 2002, after briefing and oral argument, the Third Circuit, in an Opinion dated July 9, 2004, affirmed the District Court's dismissal of the Complaint.