The Settlement Fairness Hearing was held on July 10, 2006. At the Hearing, the motion for final approval of the settlement, the plan of allocation, and the attorneys’ fees and expenses was granted. The complaint is now dismissed with prejudice by the Order issued on July 11, 2006, signed by U.S. District Judge Steven D. Merryday.
On October 19, 2005, the Court entered the Order dismissing the action without prejudice to the right of any party within 60 days to submit a stipulated form of final order or judgment or to move to reopen for good cause. On February 1, 2006, the plaintiffs filed a Consent Motion For Preliminary Approval Of Settlement.
On December 16, 2003, the Court entered the Order signed by U.S. District Judge Steven D. Merryday granting the motion for appointment as lead plaintiffs and for approval of selection of lead counsel. On March 2, 2004, the plaintiffs field a Consolidated Amended Complaint, and on June 18, 2004, the defendants responded by filing several motions to dismiss the Consolidated Amended Complaint. On August 27, 2004, the plaintiffs field a notice of voluntary dismissal, and on August 31, 2004, the Court entered the Order dismissing the action with prejudice against certain individual defendants; Merrill Lynch; Pierce, Fenner & Smith Inc.; RBC Dain Rauscher Inc.; and, Wells Fargo Securities, LLC. On December 20, 2004, Tropical Sportswear International, Inc. filed a notice of suggestion of bankruptcy. On January 6, 2005, the plaintiffs filed another notice of voluntary dismissal, and on January 14, 2005, the Court entered the Order dismissing without prejudice plaintiffs' claims against one of the individual defendants. That same day, the Court entered the Order regarding Tropical Sportswear International's Notice of Bankruptcy previously filed on December 20, 2004. U.S. District Judge Steven D. Merryday ordered the action stayed and required that Tropical Sportswear International notify the court within ten days of either (1) termination of the bankruptcy proceeding or (2) any order entered by the bankruptcy court lifting the automatic stay. In April 4, 2005, the Court entered the Order denying the defendants June 18, 2004 motions to dismiss the Consolidated Amended Complaint, while Tropical Sportswear’s motion to dismiss was terminated.
The original lawsuit makes a number of allegations against the defendants, including allegations that during the Class Period, the defendants materially misled the investing public by publicly issuing false and misleading statements and omitting to disclose material facts concerning the Companys operations and performance and the retail market for its goods. Specifically, the 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 April 17, 2002 and January 20, 2003, thereby artificially inflating the price of TSI's publicly traded securities. The Complaint alleges the statements were materially false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others: (1) that the
Company's plan to consolidate certain administrative, cutting and related
functions ("Project Synergy") was a failure because the Company was having
difficulties streamlining its operations; (2) that as a result of Project
Synergy, the Company was experiencing late deliveries, which forced the Company
to provide special sales allowances to customers and lead to numerous customer
cancellations; (3) that Project Synergy's disruptions had a negative impact on
one-third of the Company's overall business; (4) that sales of its Savane brand
were flat; (5) that sales of its Duck Head brand had materially declined; and
(6) that the combination of the above factors had a material effect on the
Company's financial performance.