According to the law firm press release, Kohl’s operates department stores across the United States that sell moderately priced apparel and home fashions that are targeted to middle-income consumers.
The complaint alleges that during the Class Period, defendants issued false and misleading statements regarding the Company’s financial results. Specifically, defendants misrepresented and/or failed to disclose that: (i) the Company’s reported debt was materially understated; (ii) the Company’s reported equity was materially overstated; (iii) the Company’s leverage ratios, including its debt to equity ratio, were materially understated; (iv) the Company violated accounting standards associated with the accounting for and disclosure of leases; (v) the financial statements issued by the Company during the Class Period were not fairly presented in conformity with GAAP and were materially false and misleading; and (vi) the Company’s representations about its internal and disclosure controls and the certifications issued by defendants thereon were materially false and misleading.
On August 4, 2011, the Company announced that it had identified certain errors in its accounting for its leases and had “commenced a detailed review of its historical lease accounting with the goal of quantifying the impact of these errors for each affected reporting period.” In response to this announcement, the price of Kohl’s common stock declined nearly 8%, closing at $47.67 per share on August 4, 2011. On August 11, 2011, Kohl’s filed a Form 8-K with the SEC reporting that as a result of errors related to its accounting for leases, investors should no longer rely upon the financial statements included in the Company’s 2010 Form 10-K and first quarter 2011 Form 10-Q. Then, on September 8, 2011, Kohl’s filed a notification of late filing with the SEC on Form 12b-25 disclosing that the Company was unable to file its Form 10-Q for the quarter ended July 30, 2011, due to various errors in its accounting for both store and equipment leases. In response to this announcement, the price of Kohl’s common stock declined nearly 2.5%, closing at $43.87 per share on September 8, 2011.
On October 15, 2013, this case was transferred to the Eastern District of Wisconsin.
An amended complaint was filed on December 27, 2013.
This case was ordered dismissed with prejudice on July 20, 2017. A Notice of Appeal of this decision was filed on August 17. On August 3, 2018, the Court of Appeals affirmed the District Court's decision to dismiss the case.