On January 18, 2008, a Motion to Dismiss was filed by the defendants in response. On May 20, 2008, the defendants’ Motion to Dismiss was granted by Order of the court. A Final Judgment was rendered on July 15, 2008, dismissing the plaintiffs’ consolidated amended complaint with prejudice and without costs.
On September 5, 2007, Judge Alvin K. Hellerstein issued the Order consolidating two related securities actions under Master File No. 1:07-cv-04774-AKH. Further, the Order appointed Pinellas Park Retirement System (General Employees) as Lead Plaintiff and Lerach Coughlin Stoia Geller Rudman & Robbins LLP as Lead Counsel. On November 19, 2007, the Lead Plaintiff filed a Consolidated Amended Complaint.
The original complaint charges Macy's and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Macy's, the second-largest U.S. department store franchise, operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. Macy's acquired May Department Stores Co. ("May") in 2005 for $11 billion.
The complaint alleges that between February 8, 2007 and May 15, 2007, defendants caused Macy's shares to trade at artificially inflated levels by concealing that the May integration was actually failing, sales growth was diminishing, the Company's business had deteriorated, and as a result, its sales projections were grossly overstated. Defendants' positive statements had their intended effect and the Company's stock price reached a Class Period high of $46.70 by March 23, 2007.
The complaint further alleges that Macy's stock price plummeted between May 10, 2007 and May 15, 2007, as the Company disclosed that customers of the former May stores had actually rejected the rapid conversion, that sales at the Company's new Macy's stores had declined during the first quarter of 2007, and that in particular, the Company's decision to dramatically cut the number of days coupons could be used at the former May locations had badly damaged sales. On this news, the Company's stock price plunged to a price nearly 18% lower than its Class Period high, erasing over $3 billion in market capitalization.