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Case Status:    SETTLED
On or around 05/29/2007 (Ongoing date of last review)

Filing Date: August 15, 2005

According to a press release dated May 24, 2007, after mediation, the parties to the purported class actions, Andropolis v. Red Robin Gourmet Burgers, et al (consolidated with Baird v. Red Robin Gourmet Burgers, et al), and Wilster v. Snyder et al, have signed memoranda of understanding providing for settlements to resolve the litigations, each settlement subject to approval by the court. While the Company and the individual defendants continue to believe that the actions were properly dismissed by the district court, a decision was made to enter into these memoranda of understanding to avoid the burden, risk and expense that would result from the continued pursuit by plaintiffs of the appeals and underlying claims in these lawsuits. The proposed Andropolis settlement involves a $1.5 million payment, covered by insurance, to the putative class and its counsel. The proposed Wilster settlement involves the payment of $250,000 to plaintiff's counsel, also covered by insurance, and an agreement to adopt certain corporate governance measures. The Company expects that the proposed Andropolis settlement will be filed with the court prior to the end of May, and that the proposed Wilster settlement will be filed in late May or early June.

On January 17, 2007, the Court entered the Final Judgment in favor of Defendants, and against Plaintiff, dismissing Plaintiff's claims with prejudice. Soon after, the plaintiffs filed a Notice of Appeal as to the January 2007 Judgment and Memorandum & Opinion dismissing the Plaintiff’s claims with prejudice. On May 14, 2007, the Court entered the Order of the U.S. Court of Appeals for the Tenth Circuit. According to the Order, upon consideration of joint motion of parties to voluntarily dismiss this appeal, the appeal is dismissed, each party to bear its own costs. If District Court does not approve settlement reached, counsel will reinstate appeal upon motion made by appellant within 30 days of the order denying approval of settlement. On May 24, 2007, a Stipulation of Settlement was filed.

According to an article dated January 8, 2007, Red Robin Gourmet Burgers Inc. and several of its former officials Jan. 2 won dismissal of a class securities fraud suit in the U.S. District Court for the District Court of Colorado charging the restaurant concern with deficient internal controls and accounting misconduct (Andropolis v. Red Robin Gourmet Burgers Inc., D. Colo., No.05-cv-01563-EWN-BNB, 1/2/07).
Judge Edward Nottingham said that as a whole, the plaintiff's allegations "strongly suggest that Red Robin fell victim to corporate mismanagement that, when discovered, led to an instantaneous and publicly announced change of the guard. With that change came a significant miscalculation of future profits, which Red Robin also publicly announced immediately upon discovery." According to the court, the complaint "fails to successfully allege with particularity a single false and misleading material statement or omission; thus, Plaintiff fails to state a claim for securities fraud under Section 10(b)" of the 1934 Securities Exchange Act.

As reported by the Company’s FORM 10-Q for the quarterly period ended October 1, 2006, the class has not been certified and no discovery has occurred. Lead plaintiff, City of Philadelphia Board of Pensions and Retirement (the Lead Plaintiff) and Lead Counsel have been appointed for both of these class actions. On February 28, 2006, the Lead Plaintiff filed a consolidated complaint. In addition to the allegations in the initial Andropolis Complaint against the Company and the Company’s former chief executive officer and former chief financial officer, the consolidated complaint alleges that the Company and the Company’s current chief executive officer and current chief financial officer violated Sections 10(b) and 20(a) of the Exchange Act in connection with the Company’s announcement on January 10, 2006 that it was lowering its guidance for the quarter ended December 25, 2005, alleges claims against the Company’s former controller and alleges violations of Section 14(a) of the Exchange Act. The consolidated complaint seeks damages on behalf of a putative class of purchasers of the Company’s common stock during the putative class period of August 13, 2004 to January 9, 2006 (inclusive). All defendants have filed motions to dismiss the consolidated complaint that are currently pending before the court.

Several purported shareholder class action lawsuits have been filed against Red Robin Gourmet Burgers, Inc. and certain of its present and former executive officers alleging defendants violated federal securities laws. Specifically, the Complaint alleges that, during the Class Period, Red Robin issued a series of materially false and misleading statements regarding Red Robin's business and prospects and concealed improper self-dealing by its CEO. On August 11, 2005, Red Robin reported that its second quarter results would be lower than expectations due to charges and adjustments to various accounts and that its Chairman, President and CEO had resigned in light of an investigation into his personal use of Red Robin's assets. On this news, Red Robin stock fell from a close of $59.79 per share on August 11, 2005, to close at $45.55 per share on August 12, 2005.

COMPANY INFORMATION:

Sector: Services
Industry: Restaurants
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: RRGB
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


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COURT: D. Colorado
DOCKET #: 05-CV-01563
JUDGE: Hon. Edward W. Nottingham
DATE FILED: 08/15/2005
CLASS PERIOD START: 11/08/2004
CLASS PERIOD END: 08/11/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Brodsky & Smith, LLC (former Pennysylvania)
    11 Bala Avenue, Suite 39, Brodsky & Smith, LLC (former Pennysylvania), PA 19004
    610.668.7987 610.660.0450 · esmith@Brodsky-Smith.com
  2. Dyer & Shuman, LLP
    801 East 17th Avenue, Dyer & Shuman, LLP, CO 80218-1417
    303.861.3003 800.711.6483 · info@dyershuman.com
  3. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  4. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  5. Law Offices of Leo W. Desmond
    2161 Palm Beach Lakes Blvd., Suite 204, Law Offices of Leo W. Desmond, FL 33409
    888.337.6663 · Info@SecuritiesAttorney.com
  6. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    200 Broadhollow, Suite 406, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@lerachlaw.com
  7. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
  8. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  9. The Rosen Law Firm P.A. (Former New York Address)
    232 Madison Avenue, Suite 906, The Rosen Law Firm P.A. (Former New York Address), NY 10016
    212.686.1060 212.202.3827 · info@rosenlegal.com
No Document Title Filing Date
COURT: D. Colorado
DOCKET #: 05-CV-01563
JUDGE: Hon. Edward W. Nottingham
DATE FILED: 02/28/2006
CLASS PERIOD START: 08/13/2004
CLASS PERIOD END: 01/09/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bader, Villanueva & Feder, P.C.
    1660 Wynkoop Street, Suite 1100, Bader, Villanueva & Feder, P.C., CO 80202
    303.534.1700 ·
  2. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
No Document Title Filing Date
No Document Title Filing Date