According to the Company’s FORM 10-K for the fiscal year ended January 1, 2005, on June 22, 2004, the United States District Court for the District of Minnesota dismissed with prejudice the securities class action which had been filed against the Company and certain of its executive officers in June 2003, and which had consolidated eight separate class actions previously filed in late 2002 and early 2003. The consolidated action alleged that the defendants violated the Securities Exchange Act of 1934 by purportedly issuing false statements about the Company’s business and financial results in connection with vendor promotions. In October 2004, the District Court rejected plaintiffs’ motion requesting that this dismissal be vacated, and in November 2004 plaintiffs agreed to dismiss their appeal of the District Court’s ruling.

The original complaint charges Nash Finch Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Nash Finch is a food distribution and retail company in the United States.

Specifically, the complaint alleges that Nash Finch issued false statements, including false financial results in which the Company included income from vendor promotions to which Nash Finch was not entitled, so as to maintain favorable credit ratings on its debt. As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, permitting Nash Finch to maintain credit ratings on its $400 million in debt.

On November 8, 2002, Nash Finch issued a press release entitled "Nash Finch Explains Postponement of Earnings Release" which disclosed an SEC inquiry into its accounting practices. As a result, Nash Finch's stock collapsed to $7.60 before closing at $8.18, some 70% below the Class Period high of $28.85. It was also noted in November 2002 that Nash Finch's former CFO had sued the Company claiming he was fired in 2000 for refusing to manipulate Nash Finch's reported financial results.