According to the docket, on March 4, 2002, the Court entered the Final Judgment and Order of Dismissal with prejudice approving the Stipulation of Partial Settlement between and among the plaintiff Class and former Just For Feet, Inc. employees, officers, and/or directors. Also that day, the Court further entered the Final Order and Judgment approving the Stipulation and Agreement of Settlement between and among the Class and defendants Deloitte & Touche, LLP, and certain individual defendants. A notice of appeal was soon after filed by the defendant over the Final Judgment and Order of Dismissal with prejudice and the plaintiffs filed a notice of appeal regarding the Order awarding fees and reimbursement of expenses.
The Notice of Settlement announces that the proposed Just For Feet Settlement creates a fund in the amount of approximately $24.5 million in cash, plus interest that accrues on the fund prior to distribution. In addition, the proposed Deloitte Settlement creates a fund in the amount of $7,400,000 in cash, plus interest that accrues on the fund prior to distribution.
The original securities class action complaint charges the defendants with violations of the federal securities laws (specifically, sections 10(b) and 20 of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities Exchange Commission) by, among other things, misrepresenting and/or omitting material information concerning the Company's net earnings. The complaint further charges that these misrepresentations were the result of the combined defendants actions in, among other things, creating false billings for advertising and fixed asset costs to its vendors, understating its cost of sales through acquisition accounting, capitalizing inventory costs that should have been recorded as expenses, overstating inventory by failing to account for missing or obsolete inventory, and creating fictitious postings to both the inventory and expense accounts. The price of Just for Feet's shares were thereby artificially inflating during the Class Period.
The defendants named in the action are certain key officers and controlling personnel of Just for Feet, Inc. and the Company's auditors, Deloitte & Touche, L.L.P. This action is not brought against the Company, who announced on November 2, 1999, that it was seeking Chapter XI bankruptcy protection.