Abercrombie & Fitch Directors Receive Report of Special Litigation Committee
February 16 2007 - 5:43PM
PR Newswire (US)
NEW ALBANY, Ohio, Feb. 16 /PRNewswire-FirstCall/ -- Abercrombie
& Fitch Co. (NYSE:ANF) today announced its board of directors
has received the report of a Special litigation committee
established by the board to investigate and act with respect to
claims asserted in certain previously disclosed derivative lawsuits
brought against current and former directors and management,
including Chairman and Chief Executive Officer Michael Jeffries.
The special litigation committee has concluded that there is no
evidence to support the asserted claims, has determined it would
not be in the best interest of the Company to pursue those claims
and has directed the Company to seek dismissal of the derivative
actions. The Derivative Actions As previously disclosed, in
September 2005, a derivative action, styled The Booth Family Trust
v. Michael S. Jeffries, et al., was filed in the United States
District Court for the Southern District of Ohio, seeking to assert
claims for unspecified damages against present and former
directors, alleging various breaches of the directors' fiduciary
duty. Four similar derivative actions were filed later in 2005,
three in federal court and one in Ohio state court. The Company is
a nominal defendant in these actions. The federal-court derivative
actions have been consolidated with certain previously disclosed
purported securities law class actions for purposes of motion
practice, discovery and pretrial proceedings, under the caption In
re Abercrombie & Fitch Co. Derivative Litigation. The Company
has filed a motion to stay the consolidated federal derivative case
and the time for all other defendants to respond has been extended
pending decision of the Company's motion. The state court action,
captioned Bentley v. Jeffries, has been stayed by order of court
pending the report of the special litigation committee. The claims
asserted in the derivative actions include breach of fiduciary duty
and other common law claims based on allegations that the
defendants permitted the Company to make false or misleading public
statements, certain defendants (including Mr. Jeffries) sold shares
of common stock of the Company while in possession of material
non-public information and the defendants caused or permitted the
Company to engage in certain discriminatory behavior. The Special
Litigation Committee's Investigation The special litigation
committee was established by the board of directors in October 2005
to investigate the claims asserted in the Booth litigation. The
scope of the committee's review was subsequently expanded to
include review of the claims asserted in the additional derivative
actions. The committee was given the exclusive authority on behalf
of the board of directors to determine whether pursuing litigation
against the defendants was in the best interest of the Company, and
to take such action with respect to the derivative cases as it
deemed appropriate. The special litigation committee was composed
of outside directors and was advised by independent counsel, Cahill
Gordon & Reindel LLP. In its review, conducted over the course
of more than one year, the committee or its counsel conducted more
than 50 interviews and reviewed more than 100,000 pages of
documents. The Special Litigation Committee's Conclusion Based on
its review, the special litigation committee concluded that there
is no evidence to support the allegations of wrongdoing by the
defendants asserted in the derivative actions, including the
allegations regarding misleading statements or omissions, insider
trading, and failure to deter discriminatory behavior. The special
litigation committee therefore determined that it would not be in
the best interest of the Company to pursue the claims asserted, and
has directed the Company to seek dismissal of the derivative
actions. Abercrombie & Fitch operated 357 Abercrombie &
Fitch stores, 177 abercrombie stores, 390 Hollister Co. stores and
14 RUEHL stores in the United States at the end of fiscal January.
The Company also operated three Abercrombie & Fitch stores and
three Hollister Co. stores in Canada. The Company operates
e-commerce websites at http://www.abercrombie.com/,
http://www.abercrombiekids.com/, and http://www.hollisterco.com/.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 A&F cautions that any forward-looking
statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) contained in this Press Release or
made by management of A&F involve risks and uncertainties and
are subject to change based on various important factors, many of
which may be beyond the Company's control. Words such as
"estimate," "project," "plan," "believe," "expect," "anticipate,"
"intend," and similar expressions may identify forward-looking
statements. The following factors, in addition to those included in
the disclosure under the heading "FORWARD-LOOKING STATEMENTS AND
RISK FACTORS" in "ITEM 1A. RISK FACTORS" of A&F's Annual Report
on Form 10-K for the fiscal year ended January 28, 2006, in some
cases have affected and in the future could affect the Company's
financial performance and could cause actual results for the 2006
fiscal year and beyond to differ materially from those expressed or
implied in any of the forward-looking statements included in this
Press Release or otherwise made by management: changes in consumer
spending patterns and consumer preferences; the effects of
political and economic events and conditions domestically and in
foreign jurisdictions in which the Company operates, including, but
not limited to, acts of terrorism or war; the impact of competition
and pricing; changes in weather patterns; postal rate increases and
changes; paper and printing costs; market price of key raw
materials; ability to source product from its global supplier base;
political stability; currency and exchange risks and changes in
existing or potential duties, tariffs or quotas; availability of
suitable store locations at appropriate terms; ability to develop
new merchandise; ability to hire, train and retain associates; and
the outcome of pending litigation. Future economic and industry
trends that could potentially impact revenue and profitability are
difficult to predict. Therefore, there can be no assurance that the
forward-looking statements included in this Press Release will
prove to be accurate. In light of the significant uncertainties in
the forward- looking statements included herein, the inclusion of
such information should not be regarded as a representation by the
Company, or any other person, that the objectives of the Company
will be achieved. The forward-looking statements herein are based
on information presently available to the management of the
Company. Except as may be required by applicable law, the Company
assumes no obligation to publicly update or revise its
forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied
therein will not be realized. DATASOURCE: Abercrombie & Fitch
CONTACT: Thomas D. Lennox, Vice President, Corporate
Communications, Abercrombie & Fitch, +1-614-283-6751 Web site:
http://www.abercrombie.com/ http://www.abercrombiekids.com/
http://www.hollisterco.com/
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