According to the latest docket posted, on January 19, 2006, the Court entered the Judgment dismissing the complaint with prejudice. On February 16, 2006, the plaintiffs filed a notice of appeal. On April 7, 2006, the Court entered the Judgment from the U.S. Court of Appeals for the Eighth Circuit. The joint motion for dismissal of the appeal is granted in according with the stipulation. The appeal is dismissed
In a press release dated January 17, 2006, the U.S. District Court for the District of Minnesota has dismissed in its entirety the consolidated securities class action complaint filed against the company, and certain officers and directors. The retailer added that plaintiffs have 30 days from the date judgment is entered in which to file a notice of appeal.
The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period, which statements had the effect of artificially inflating the market price of the Company's securities. More specifically, defendants failed to disclose that: (i) the Company's co-branded credit card program was faltering; (ii) the value of the Company's inventory was overstated, causing the Company's future margins to be negatively impacted; (iii) the Company's debt capacity was jeopardized and was inconsistent with defendants' growth plans; (iv) the Company was experiencing average trends with respect to its sales; and (v) defendants' projections of positive comparable sales growth of 3%-5% and pretax income of $13 million were materially misleading.
The complaint further alleges that on or around November 9, 2004, Gander Mountain announced it had "lowered its outlook for pretax income for fiscal 2004 to a range of $8 million to $13 million, compared with the company's prior guidance of $16 million to $21 million." On January 14, 2005, the Company issued a press release lowering its outlook for pretax income for fiscal 2004 even further, "to a range of $2.0 million to $4.0 million, compared with the company's prior guidance of $8 million to $13 million." As a result, Gander Mountain's shares plummeted to a close of $9.43. During the Class Period, Gander Mountain traded as high as $24.65.