On December 18, 2008, one of the two lead plaintiffs filed a notice of voluntary dismissal of the action. On December 30, 2008, District Judge William J. Haynes, Jr. ordered the action dismissed without prejudice.
On January 22, 2008, the Court entered the Stipulation and Order Consolidating Related Actions. According to the Order, several actions are consolidated for all purposes and the caption of these consolidated actions shall be "In re Genesco Inc. Securities Litigation" and the files of this action shall be maintained in one file under Master File No. 3:07-1183. On March 28, 2008, the Court entered the Order granting the motion to appoint Rick Roeglin and Joseph Falzone as lead plaintiffs and approving their selection of lead counsel.
The Complaint charges that Genesco, and certain of its officers and directors, violated Federal Securities Laws. Specifically, the Complaint alleges that during the Class Period, Defendants concealed the following information, which caused their statements to be materially false and misleading: (I) the Company’s stores were not performing well and would not produce the financial results being forecast; (ii) the Journeys stores were performing poorly relative to plan with big same store sales declines; and (iii) these poor results would be considered adverse events to potential acquirers, leading to significant share price declines at Genesco.
As a result of the representations made by Defendants, Genesco was seen as an attractive acquisition target for Foot Locker, Inc. Foot Locker ultimately made an offer and The Finish Line, Inc. and Headwind, Inc., a wholly owned subsidiary of Finish Line, subsequently made an increased offer, based on Genesco’s purported success. When the truth about Genesco’s results began to be revealed, however, Finish Line indicated it would no longer pursue the acquisition. Then, on November 26, 2007, Genesco received a subpoena from the Office of the U.S. Attorney for the Southern District of New York seeking documents related to its merger agreement and in connection with alleged violations of federal fraud statutes. On this news, Genesco’s stock plunged to $25.44 per share on November 27, 2007.
A similar, purported class action complaint has also been filed in the U.S. District Court for the Southern District of New York.