Panera Bread Company Case 1/25/2008
February 2011 - As per the Notice:
Security and Time Period: Panera common stock (symbol PNRA) purchased or acquired during the period from and including November 1, 2005 through and including July 26, 2007.
Settlement Fund: $5,750,000 in cash plus any interest earned. Your recovery will depend on the timing of your purchases, acquisitions, and any sales of Panera common stock during the Class Period. Based on the information currently available to Lead Plaintiff and the analysis performed by its damages consultant, it is estimated that if Class Members submit claims for 100% of the shares eligible for distribution under the Plan of Allocation (described below), the estimated average distribution per share of common stock will be approximately $0.13 before deduction of Court-approved fees and expenses, including the cost of notifying members of the Class and settlement administration. Historically, actual claims rates are less than 100%, which result in higher distributions per share. A Class Member’s actual recovery will be a proportion of the Net Settlement Fund determined by that claimant’s recognized claim as compared to the total recognized claims of all Class Members who submit valid Proof of Claim and Release forms (―Proof of Claim‖).
Reasons for Settlement: Avoids the costs and risks associated with continued litigation, including the danger of no recovery.
If the Case Had Not Settled: Continuing with the case could have resulted in loss at summary judgment, trial or on appeal. The two sides vigorously disagree on both liability and the amount of money that could have been won if Lead Plaintiff prevailed at trial. The parties disagree about: (1) whether there was any wrongdoing on the part of the Settling Defendants; (2) the method for determining whether the price of Panera common stock was artificially inflated during the relevant period; (3) the amount of any such alleged inflation; (4) the extent that various statements or omissions alleged by Lead Plaintiff influenced the trading price of Panera common stock during the Class Period; and (5) whether the statements or omissions alleged were material, false, misleading or otherwise actionable under the federal securities laws.
JANUARY 2008 - According to a press release dated January 25, 2008, the complaint charges Panera Bread and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Panera Bread engages in the ownership and franchising of bakery-cafes in the United States under the Panera Bread„ and Saint Louis Bread Co.„ names.
According to the complaint, throughout the Class Period, the Company highlighted its increasing system-wide sales and, as a result, continuously increased its earnings guidance. Moreover, the Company was rapidly opening new locations throughout the United States. Unbeknownst to shareholders, the Company’s aggressive growth strategy was causing the Company to experience declining sales at its existing stores.
Additionally, the complaint alleges that, throughout the Class Period, defendants issued materially false and misleading statements and failed to disclose (i) that the Company was experiencing negative trends in its business which were causing it to experience rising expenses and slow growth; (ii) that the Company’s store expansion strategy was causing the Company to yield a lower return on capital and experience a decline in sales per restaurant as the Company’s new store openings began to cannibalize sales from existing stores; and (iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and revenue growth rate.
Then, on July, 26, 2006, Panera Bread announced its financial results for the second quarter of 2006, the period ended June 27, 2006. In response to this announcement, the price of Panera Bread common stock fell $7.34 per share, or approximately 12%, to close at $51.93 per share, on extremely heavy trading volume.