Macy's obtains dismissal of securities class action
Clients Macy's, Inc.
Jones Day won dismissal of a shareholder class action against Macy's, Inc. and its CEO and CFO arising out of a decline in Macy's stock price in spring 2007 after it announced disappointing sales results. The plaintiffs' complaint alleged that the defendants misled investors into believing that Macy's was successfully integrating a large acquisition it had made in 2005 (of May Department Stores Co.), and that same-store sales were going to increase in 2007 over their 2006 levels. Plaintiffs charged that the defendants issued sales forecasts that they knew the company would not be able to meet, and that they failed to correct investors' misimpressions after defendants became aware that the 2007 sales forecasts would not be met. Jones Day filed a motion to dismiss the complaint on the grounds that it did not plead false statements with particularity -- that is, it did not allege facts showing that defendants did not believe their optimistic statements about 2007 sales at the time those statements were made -- and that it did not raise a strong inference of defendants' scienter. The court dismissed the complaint on defendants' motion; the plaintiffs elected not to file a further amended complaint and did not appeal the dismissal.
In re Macy's, Inc. Securities Litigation, No. 07-CV-04774-AKH (S.D.N.Y.)