The complaint alleges that, throughout the Class Period, defendants made numerous positive statements regarding the Company’s financial condition, business and prospects. The complaint further alleges that these statements were materially false and misleading because defendants failed to disclose the following adverse facts, among others: (a) that the K&G division was performing poorly and not meeting internal expectations; (b) that the Company was experiencing significant difficulties integrating the After Hours acquisition which was causing a severe disruption in that division’s business and reducing sales volumes below budgeted levels; (c) that, given the deteriorating demand for the Company’s products, the Company was forced to significantly discount products beyond customary discounts which would further erode earnings; and (d) that as a result of the foregoing, defendants’ positive statements concerning the Company’s guidance and prospects were lacking in a reasonable basis at all relevant times.
On January 9, 2008, Men’s Wearhouse announced its mid fourth quarter update for the quarter ending February 2, 2008. In response to the Company’s reduced guidance for fiscal 2007, the price of Men’s Wearhouse common stock fell $7.60 per share, or 30%, to close at $17.84 per share, on January 10, 2008, on extremely heavy trading volume.
On December 16, 2009, Judge Lynn N. Hughes granted the motion to appoint the Iron Workers Local 55 Pension Fund as lead plaintiff and appointed Roger Greenberg of Schwartz Junell Greenberg & Oathout, LLP, as liaison counsel. On February 26, 2010, the lead plaintiff filed an Amended Class Action Complaint. On April 12, 2010, the defendants filed a motion to dismiss the Amended Class Action Complaint. On July 22, 2011, Judge Lynn N. Hughes dismissed the action and the case is now terminated.