NEW YORK, March 13, 2002 (PRIMEZONE) -- Please take notice that the law firm of Kirby McInerney & Squire, LLP has commenced a class action lawsuit in the United States District Court for the Eastern District of Michigan on behalf of all purchasers of Kmart Corporation (NYSE:KM) securities during the period from May 17, 2001 through January 22, 2002 (the "Class Period"). The action seeks to recover losses suffered by such investors.
A copy of the complaint is available from the Court or from Kirby McInerney & Squire. Please visit our Website, which offers summary and detailed information concerning the case at www.kmslaw.com/new_cases/kmart/kmart.htm, or contact us by phone at (888) 529-4787 or by email at obraun@kmslaw.com.
The Complaint alleges that Kmart Corporation ("Kmart" or the "Company") and its former Chairman and Chief Executive Officer violated Section 10(b) of the Securities and Exchange Act of 1934 by issuing a series of materially false and misleading statements concerning Kmart's financial results and operational condition during the Class Period. The complaint alleges that these statements had the effect of artificially inflating the price of Kmart securities during the Class Period. Charles Conaway, Kmart's former Chairman and Chief Executive Officer, is the named defendant in the action. Kmart is not named in this action due to its bankruptcy filing.
Prior to and throughout the Class Period, as alleged in the Complaint, Kmart and defendant Conaway represented that the Company was engaged in a comprehensive restructuring of the Company's operations which was revitalizing the Company and its sales. The Complaint alleges that these representations were materially false and misleading because they failed to disclose and misrepresented the following adverse material facts: (a) that Kmart's purported revitalization was a complete failure as the Company was continuing to lose market share to competitors, and the Company's purported efforts to reverse this trend were not meeting with success; (b) that the Company's supply chain management was extremely problematic as the Company's distribution centers were outdated and inefficient and the Company's supply chain software was plagued by glitches, causing the Company to experience inventory problems and difficulties routing inventory to stores, thereby negatively impacting the Company's sales; and (c) that the Company was experiencing substantial liquidity problems which would necessitate a major restructuring of the Company's operations and possibly a bankruptcy filing, which ultimately happened.
On January 22, 2002, Kmart issued a press release announcing that it had filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. According to the press release, the Company's decision to seek "judicial reorganization" was based on a "combination of factors, including a rapid decline in its liquidity resulting from Kmart's below-plan sales and earnings performance in the fourth quarter ... ." Following this announcement, the price of Kmart common stock dropped from $1.74 per share to $0.70 per share, a one day decline of 59%, on extremely heavy trading volume.
Plaintiffs are represented by Kirby McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's Website at www.kmslaw.com.
If you are a member of the class described above, you may, no later than April 22, 2002, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, please contact:
Ira M. Press, Esq. Orie Braun KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: obraun@kmslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca