According to a press release dated May 1, 2009, the Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Liz Claiborne's business, operations and prospects were materially false and misleading. Specifically, the Complaint alleges that defendants' public statements were false and misleading or failed to disclose or indicate, among other things, the following: (1) that the Company's wholesalers were significantly reducing orders; (2) that, specifically, Macy's, Liz Claiborne's largest customer, slashed orders in response to Liz Claiborne's decision to partner with JCPenney and launch the Liz & Co. and CONCEPTS by Claiborne brands at JCPenney; (3) that this fact had been known to the Company and management as early as November 22, 2006; and (4), as a result of the foregoing, that the statements made by the Company and management lacked a reasonable basis.
On May 1, 2007, Liz Claiborne shocked the market when the Company reported an approximately 65 percent drop in earnings, forecasted an unexpected decline in annual profit, and disclosed massive cutbacks in orders from Macy's. Moreover, the Company revealed that Macy's reduced orders were a reaction to the new Liz & Co. and CONCEPTS by Claiborne brands launched at JCPenney. On this news, shares of Liz Claiborne declined $7.72 per share, more than 17%, to close on May 1, 2007 at $37.00 per share, on unusually heavy trading volume.
On February 17, 2010, Judge Richard J. Holwell granted the motion to appoint Movant James S. Metz as lead plaintiff. The law firm Glancy Binkow & Goldberg LLP was approved as lead counsel. On April 29, 2010, the lead plaintiff filed an Amended Complaint, and amended the complaint again on August 23, 2010. The defendants responded by filing a motion to dismiss on October 4, 2010.
According to a news article dated September 29, 2011, a New York federal judge on Thursday tossed a putative shareholder class action accusing Liz Claiborne Inc. of misrepresenting its relationship with Macy's Inc. and J.C. Penney Co., saying the plaintiffs had offered no evidence showing that Claiborne executives intended to mislead the public.