According to the Company’s Form 10-Q for the quarterly period ended September 11, 2004. On April 29, 2004, the court granted preliminary approval to a stipulation of settlement between the company and plaintiffs. The court granted final approval of the settlement on August 16, 2004, and on September 15, 2004, the period in which to appeal the court’s action expired.
By the Notice of Pendency and Proposed Settlement of Class Action and Notice of Motion for Attorneys Fees and Expenses dated May 3, 2003, the proposed Settlement provides for Settlement Proceeds in the amount of $4,000,000.
The original complaint charges Supervalu, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants issued statements regarding Supervalu's 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 cost of goods sold for at least the past four years in violation of Generally Accepted Accounting Principles. As a result, the Company announced on June 26, 2002 that it expects $ 21 million in additional expenses; and (ii) based on the foregoing, defendants' statements concerning the financial condition of Supervalu were lacking in a reasonable basis at all times.
The impact of these announcements was immediately felt in the market. Shares of Supervalu fell sharply following the Company's statements on June 26, 2002. Supervalu stock closed on June 26, 2002, at $ 21.95 down approximately $ 6.11, or 22%. Subsequently, on July 1, 2002, a mere five days after the Company disclosed the existence of its internal investigation, Supervalu did, in fact, materially restate its financial statements for all of Fiscal Years 2000, 2001 and 2002.