Abercrombie & Fitch 2009 Annual Report Download - page 20

remaining claims. On January 29, 2009, the Court certified a class consisting of all store managers who served at
Hollister and abercrombie kids stores in California from May 1, 2004 through the future date upon which the
action concludes. The parties are continuing to litigate the claims of that putative class.
On September 2, 2005, a purported class action, styled Robert Ross v. Abercrombie & Fitch Company, et al.,
was filed against A&F and certain of its officers in the United States District Court for the Southern District of Ohio
on behalf of a purported class of all persons who purchased or acquired shares of A&F’s Common Stock between
June 2, 2005 and August 16, 2005. In September and October of 2005, five other purported class actions were
subsequently filed against A&F and other defendants in the same Court. All six securities cases allege claims under
the federal securities laws related to sales of Common Stock by certain defendants and to a decline in the price of
A&F’s Common Stock during the summer of 2005, allegedly as a result of misstatements attributable to A&F.
Plaintiffs seek unspecified monetary damages. On November 1, 2005, a motion to consolidate all of these
purported class actions into the first-filed case was filed by some of the plaintiffs. A&F joined in that motion. On
March 22, 2006, the motions to consolidate were granted, and these actions (together with the federal court
derivative cases described in the following paragraph) were consolidated for purposes of motion practice,
discovery and pretrial proceedings. A consolidated amended securities class action complaint (the “Complaint”)
was filed on August 14, 2006. On October 13, 2006, all defendants moved to dismiss that Complaint. On August 9,
2007, the Court denied the motions to dismiss. On September 14, 2007, defendants filed answers denying the
material allegations of the Complaint and asserting affirmative defenses. On October 26, 2007, plaintiffs moved to
certify their purported class. After briefing and argument, the motion was submitted on March 24, 2009, and
granted on May 21, 2009. On June 5, 2009, defendants petitioned the Sixth Circuit for permission to appeal the
class certification order and on August 24, 2009, the Sixth Circuit granted leave to appeal.
On September 16, 2005, a derivative action, styled The Booth Family Trust v. Michael S. Jeffries, et al.,
was filed in the United States District Court for the Southern District of Ohio, naming A&F as a nominal
defendant and seeking to assert claims for unspecified damages against nine of A&F’s present and former
directors, alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief.
In the following three months, four similar derivative actions were filed (three in the United States District
Court for the Southern District of Ohio and one in the Court of Common Pleas for Franklin County, Ohio)
against present and former directors of A&F alleging various breaches of the directors’ fiduciary duty
allegedly arising out of the same matters alleged in the Ross case and seeking equitable and monetary relief on
behalf of A&F. In March of 2006, the federal court derivative actions were consolidated with the Ross actions
for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended derivative
complaint was filed in the federal proceeding on July 10, 2006. On February 16, 2007, A&F announced that
its Board of Directors had received a report of the Special Litigation Committee established by the Board to
investigate and act with respect to claims asserted in the derivative lawsuit, which concluded that there was no
evidence to support the asserted claims and directed the Company to seek dismissal of the derivative cases. On
September 10, 2007, the Company moved to dismiss the federal derivative cases on the authority of the
Special Litigation Committee report. On March 12, 2009, the Company’s motion was granted and, on
April 10, 2009, plaintiffs filed an appeal from the order of dismissal. The state court has stayed further
proceedings in the state-court derivative action until resolution of the consolidated federal derivative cases.
Management intends to defend the aforesaid matters vigorously, as appropriate. Management is unable
to quantify the potential exposure of the aforesaid matters. However, management’s assessment of the
Company’s current exposure could change in the event of the discovery of additional facts with respect to
legal matters pending against the Company or determinations by judges, juries, administrative agencies or
other finders of fact that are not in accordance with management’s evaluation of the claims.
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