Case Page

 

Case Status:    DISMISSED    
On or around 05/19/2005 (Date of order of final judgment)

Filing Date: February 04, 2003

According to the Company’s FORM 10-Q for the quarterly period ended April 30, 2005, on December 10, 2004, the Court granted the defendants’ motion to dismiss the consolidated complaint, dismissing certain allegations supporting the claims with prejudice. For those allegations that were not dismissed with prejudice, the Court allowed the plaintiffs to amend, which they did on January 14, 2005. In that amended consolidated complaint, the plaintiffs added a claim under Section 20A of the Securities Exchange Act of 1934 and repled their Sections 10(b) and 20(a) claims based on allegations similar to those in the original consolidated complaint. After the defendants moved to dismiss the amended consolidated complaint, the plaintiffs filed a notice of voluntary dismissal May 13, 2005. The Court issued an order on May 18, 2005 dismissing the case in its entirety without prejudice.

As summarized by the same SEC filing, on various dates between February 4, 2003 and March 25, 2003, 10 purported class action lawsuits were filed in the United States District Court for the Northern District of Texas, Dallas Division, against Michaels Stores, Inc. and certain of the current and former directors and officers of Michaels. All of these lawsuits have been consolidated. The suits assert various claims under Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 related to actions prior to Michaels’ announcement on November 7, 2002, that, among other things, it had revised its outlook for the fourth fiscal quarter of 2002, adjusting downward its guidance for annual earnings per diluted share. The consolidated complaint charges that, prior to that announcement, Michaels and certain of the other defendants made misrepresentations and failed to disclose negative information about the financial condition of Michaels while the individual defendants were selling shares of Michaels common stock.

The original complaint charges Michaels Stores and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants repeatedly represented that Michaels Stores' financial condition was strong and that the Company was increasing its market share and would continue to do so in the foreseeable future. The Company was persistent in its claims despite a known downturn in the consumer-goods markets and a very, very difficult earnings environment. In fact, throughout the Class Period, defendants consistently appeared at analyst conferences and in other public forums and made very positive statements about Michaels Stores.

The complaint further alleges that as a result it was only on November 7, 2002, when the Company released results for its third quarter 2002, that investors learned the following: (i) defendants' claims that Michaels Stores' purported "record setting" growth was the result of systems and/or infrastructure upgrades, or any other improvements made by defendants, were false; (ii) many of Michaels Stores' customers were already curtailing their spending for hobby and entertainment - or discretionary purchases - by the inception of the Class Period and, as a result, Michaels Stores was experiencing the same adverse market conditions which were negatively impacting the Company's competitors; (iii) the Company was not "in great shape," it did not have "considerable momentum" and was not proceeding according to guidance sponsored or provided by defendants; and (iv) notwithstanding defendants' efforts to create the materially false impression that the company had achieved record results in the fiscal second quarter, the truth was that Michaels Stores was already suffering from the same adverse market conditions other retailers were experiencing.

The complaint also alleges that during the Class Period, at the time that Michaels Stores was being adversely affected by the aforementioned factors, but prior to any
disclosure to the market, certain of the defendants sold more than $15.3 million worth of their personally held Michaels Stores common stock while in possession of material adverse information. In fact, the CEO and President of the Company sold over 125,000 shares of his privately held Company shares during the Class Period for over $5.8 million in proceeds.

COMPANY INFORMATION:

Sector: Services
Industry: Retail (Specialty)
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MIK
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. Texas
DOCKET #: 03-CV-0246
JUDGE: Hon. Barbara M. G. Lynn
DATE FILED: 02/04/2003
CLASS PERIOD START: 08/08/2002
CLASS PERIOD END: 11/07/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR)
    P.O. Box 25438, Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR), AR 72221-5438
    501.312.8500 501.312.8505 ·
  2. Faruqi & Faruqi LLP (New York) (former)
    320 East 39th Street, Faruqi & Faruqi LLP (New York) (former), NY 10016
    212.983.9330 212.983.9331 · Nfaruqi@faruqilaw.com
  3. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  4. Glancy Binkow & GoldBerg LLP
    1925 Century Park East, Suite 2100, Glancy Binkow & GoldBerg LLP, CA 90067
    310-201-9150 · info@glancylaw.com
  5. Goodkind Labaton Rudoff & Sucharow LLP
    100 Park Avenue, Goodkind Labaton Rudoff & Sucharow LLP, NY 10017
    212.907.0700 212.818.0477 · info@glrslaw.com
  6. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  7. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  8. Reinhardt, Wendorf & Blanchfield Attorneys at Law
    E-1000 First National Bank Building, 332 Minnesota Street, Reinhardt, Wendorf & Blanchfield Attorneys at Law, MN 55101
    800.465.1592 651.297.6543 · info@ralawfirm.com
  9. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  10. Scott & Scott LLC (Connecticut)
    P.O. Box 192, 108 Norwich Avenue, Scott & Scott LLC (Connecticut), CT 06415
    860.537.5537 860.537.4432 · scottlaw@scott-scott.com
  11. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date
COURT: N.D. Texas
DOCKET #: 03-CV-0246
JUDGE: Hon. Barbara M. G. Lynn
DATE FILED: 01/14/2005
CLASS PERIOD START: 08/08/2002
CLASS PERIOD END: 11/07/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller Bowman & Coates (Boca Raton, FL)
    2255 Glades Road Suite 421A, Cauley Geller Bowman & Coates (Boca Raton, FL), FL 33431
    561.750.3000 ·
  2. Claxton & Hill
    3131 McKinney Ave., Suite 700 LB 103, Claxton & Hill, TX 75204-2471
    214.969.9099 ·
  3. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  4. Goodkind Labaton Rudoff & Sucharow LLP
    100 Park Avenue, Goodkind Labaton Rudoff & Sucharow LLP, NY 10017
    212.907.0700 212.818.0477 · info@glrslaw.com
  5. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    401 B Street, Suite 1700, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    206.749.5544 206.749.9978 · info@lerachlaw.com
  6. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  7. Provost & Umphrey Law Firm, LLP (Dallas )
    3232 McKinney Avenue, Suite 700, Provost & Umphrey Law Firm, LLP (Dallas ), TX 75204
    214.744.3000 214.744.3015 · info@provostumphrey.com
  8. Scott & Scott LLC (Connecticut)
    P.O. Box 192, 108 Norwich Avenue, Scott & Scott LLC (Connecticut), CT 06415
    860.537.5537 860.537.4432 · scottlaw@scott-scott.com
  9. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  10. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date
No Document Title Filing Date