Great Wolf Resorts Inc. ("Great Wolf" or the Company) is a chain of indoor water park resorts.

The original Complaint alleges that Defendants' registration statements issued in connection with the Company's 2004 Initial Public Offering ("IPO") contained untrue statements of material fact. According to the Complaint, at the root of these issues was the fact that the Company provided misleading, unreliable and unpredictable quarterly and annualized guidance based on its preferred non-GAAP EBITDA measure. Since Defendants' EBITDA number was allegedly unreliable, both the Company's business prospects and in fact the value of the underlying business was in doubt to the extent this defective measure was used for valuation purposes to convince investors to buy the Company's stock during the IPO. The Complaint alleges that during the Class Period, Great Wolf and certain individual Defendants violated provisions of the federal securities laws (Securities Act of 1933 and the Securities Exchange Act of 1934).

The Complaint further alleges that on or around July 28, 2005, investors' interests drowned as they learned the true magnitude of the Company's earnings shortfall and its cause - the alleged unreliability of Defendants' EBITDA projections. Worse, analysts concluded that Defendants were fully aware of the true magnitude of the earnings miss when they were out marketing clients at the end of June but failed to publicly disclose the materiality of the problem at that time. According to the Associated Press, analysts point to the Company's inability to handle the increased competition, saying it contributed to other problems, such as a second-quarter earnings miss and questions about the Company's internal controls. On the news of July 28, 2005, the price of the Company's stock plunged $6.12 to $13.65, on extremely heavy volume of 6.0 million shares. The price has continued to decline since July and today traded at $8.79.

According to a press release dated June 14, 2006, Great Wolf announced that the United States District Court of the Western District of Wisconsin has dismissed in its entirety the pending consolidated class action Complaint alleging that the Company violated securities laws with regard to its 2004 initial public offering and its July 2005 announcement that earnings fell short of expectations for the second quarter of 2005.