According to the docket posted, on August 1, 2003, the plaintiffs filed a notice of appeal from the Order granting the motion to dismiss the complaint. On March 8, 2006, the Court entered the certified copy of the Order from the Second Circuit Court of Appeals. According to the Order, the undersigned counsel hereby stipulate that the appeal is hereby withdrawn from active consideration before the court. Such withdrawal shall be without prejudice to a reactivation of the appeal by appellant's counsel so notifying this court by filing written notice of reactivation with the clerk of this Court by July 31, 2006. If not reactivated, the appeal shall be deemed withdrawn with prejudice and without costs or attorneys fees incurred to date.
In the company's press release dated July 04, 2003, the US District Court Southern District of New York dismissed the shareholders’ class action against HUGO BOSS AG on July 03, 2003, thus following the motion of HUGO BOSS AG and the view of the Managing Board.
The plaintiff charged defendants with federal securities law violations in connection to the issuance of "material misrepresentations" and "omissions of material facts" concerning the company's financial condition. Marty Staff, former chief executive officer of Hugo Boss USA, and Vincent Ottomanelli, former chief financial officer of the unit were sued because they, as "control persons," were directly "involved in the day-to-day operations of the company at the highest levels and [were] privy to confidential proprietary information concerning the company and its operations."
The lawsuit said that as of July 2001, there were 70.4 million shares of Hugo Boss common and preferred stock outstanding. The shareholder plaintiff said he believed that there could be "thousands of shareholders of record."
Court documents said that the financial results for the third quarter of 2001 through the first quarter of 2002 were "materially false and misleading because defendants overstated the company's revenues by including as revenues amounts for products that the company did not actually sell, but instead forced its retail network to accept notwithstanding that there was no demand for these products."
The company on May 27 lowered its full-year profit forecast for 2002 due to inventory discrepancies during stocktaking in the U.S. The plaintiff shareholder alleged that as a result of the "channel-stuffing scheme," Boss was portrayed as a firm that was financially stable when its condition in fact was severely worse than publicly represented. Specifically, plaintiff charged that the firm's "income was overstated by at least $11 million after taxes." The legal action is seeking class action certification, compensation for unspecified damages and attorneys' fees.