Summary of Case:
A securities class action has been filed against Liz Claiborne (Ticker: LIZ) ("Liz Claiborne" or the "Company") on behalf of all common stock purchasers from February 28, 2007 through April 30, 2007 (Class Period) in the United States District Court for the Southern District of New York.
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.
