Labaton Keller Sucharow serves as counsel for St. Paul Teachers' Retirement Fund Association in this securities class action against Conn's, Inc. (Conn's), a specialty retailer of home goods and office equipment.
The action alleges that beginning in late 2012, Conn's lowered its underwriting standards in all of its stores in order to push larger ticket items onto customers who had little or no ability to pay. In doing so, Conn's substantially increased sales revenues during the class period based, in significant part, on sales that were only achieved through the extension of high-risk consumer credit.
Additionally, the defendants allegedly made false and/or misleading statements about the company's business, operations, and prospects. Contrary to its assurances, Conn's had dramatically loosened its lending policies, lowered its underwriting standards, and allowed non-creditworthy customers to receive substantial lines of credit at Conn's retail locations, exposing the company to high amounts of bad debt and increased collections risks.
On December 11, 2014, the lead plaintiffs filed a Notice of Recent Events, to alert the court of Conn's disclosures on December 9-10, 2014 of additional bad debt writedowns, the resignation of the company's CFO, and an informal inquiry of Conn's by the SEC related to the company's underwriting policies and bad debt provisions.
The operative fourth amended complaint was filed on July 21, 2015, with an alleged class period of April 3, 2013, through December 9, 2014, inclusive. In March 2016, the court heard oral arguments on the defendants' motion to dismiss. The court granted in part and denied in part the defendants' motion to dismiss.
The Parties agreed to settle the Action in March 2018. On June 13, 2018, the Parties executed the Stipulation, which sets forth the final terms and conditions of the Settlement. The Court granted final approval of the settlement on October 12, 2018.
The case is In re Conn's, Inc. Securities Litigation, No. 14-cv-0548, (S.D. Tex). The lead plaintiffs are Laborers Pension Trust Fund - Detroit and Vicinity, Connecticut Carpenters Pension Fund and Connecticut Carpenters Annuity Fund, St. Paul Teachers' Retirement Fund Association, and Universal Investment Gesellschaft m.b.H. Labaton Keller Sucharow represents St. Paul Teachers' Retirement Fund Association. The defendants are Conn's, Inc., its Chief Executive Officer Theodore Wright, its Vice President and Chief Financial Officer Brian Taylor, and its Executive Vice President and Chief Operating Officer Michael J. Poppe.
Settlement Hearing
A Settlement Hearing was held on October 11, 2018, at 2:00 p.m., in Courtroom 3A at the United States Courthouse, 515 Risk Street, Houston, TX 77002.
