The original action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period about the Company and by failing to disclose material information about the Company's plan to merge with Kmart and that when the market learned the truth, the price of Sears securities increased substantially.
On January 25, 2005, Judge Robert W. Gettleman granted the motion to appoint the Sellers Group as lead plaintiffs and approved lead plaintiff’s selection of the law firms of Squitieri & Fearon, LLP and the Law Offices of Charles J. Piven as co-lead counsel. On March 11, 2005, the lead plaintiff filed an Amended Class Action Complaint, and on May 2, 2005, the defendants filed motions to dismiss the Amended Class Action Complaint. On March 22, 2006, Judge Gettleman denied all defendants’ motion to dismiss. On April 7, 2006, the defendants filed a motion for reconsideration of the order denying the motion to dismiss.
In a press release dated August 15, 2006, the U.S. District Court for the Northern District of Illinois denied a defendant company's motion to reconsider the district court's dismissal of a securities fraud class action against it. The district court also denied a motion to certify an appeal. Shareholders sued Sears Roebuck & Co. and ESL Partners L.P. for violations of § § 10(b) and 20(a) of the Securities and Exchange Act of 1934 (see 2 S.Cl.Act.Rep. 20-2, Dec. 15, 2004). Sears and ESL moved to dismiss, and the court previously denied the motion to dismiss. Sears moved the court to reconsider the motion for dismissal. ESL moved for certification of appeal of the question of "whether §18(a) of the Securities and Exchange Act of 1934 provides the exclusive remedy for a plaintiff alleging a stock owner's untimely amendment of a statement filed pursuant to §13(d) or §13(g)." To state a claim under §10(b), shareholders must allege that the defendant knowingly made a material misstatement or omission in connection with the sale or purchase of securities with scienter, upon which the plaintiffs relied, and caused the plaintiffs' economic loss. … The district court affirmed its denial of Sears' motion to dismiss and denied the motion for reconsideration. The district court denied ESL's motion for certification of an appeal because there was not substantial ground for difference of opinion, as the plaintiffs' claims did not fall within the plain wording of §18(a).
On October 2, 2006, the lead plaintiff filed a motion to certify the class, which was approved on July 17, 2007. On May 1, 2008, the lead plaintiff filed a Second Amended Complaint. On April 20, 2009, the defendants filed two motions for summary judgment. On December 18, 2009, U.S. District Judge Robert W. Gettleman granted the motions for summary judgment of all of the defendants in the securities class action and the civil action was terminated.
On January 15, 2010, a plaintiff filed a notice of appeal. The appeal is currently pending in the Seventh Circuit Court of Appeals. On June 16, 2010, the Court entered the Mandate from the Court of Appeal, the Court dismissed appellees Sears, Roebuck & Company and Alan J. Lacy, pursuant the appellants' withdrawal of their appeal. The appeal remains active as to the other parties. According to the Order entered on July 19, 2010, the case was remanded from the Court of Appeals to the District Court for the limited purpose of conducting class action settlement approval proceedings.
On October 14, 2010, Plaintiff Maurice Levie filed an Unopposed Motion for Preliminary Approval of Class Action Settlement. The proposed settlement in the amount of $550,000.00, and resolves the action with the ESL Defendants. The settlement was preliminarily approved by Honorable Robert W. Gettleman on October 19, 2010. The settlement fairness hearing was held on January 21, 2011, and on January 27th, the Court entered the Order and Final Judgment. Plaintiffs' counsel was awarded the sum of $0.00 in fees and $250,000 in reimbursement of expenses.