TYLER – A class-action lawsuit filed against retailer J. C. Penney by Alan B. Marcus and other investors has now been settled for $97.5 million and other concessions.
Attorneys for both sides were contacted but declined to be interviewed.
Alan B. Marcus, individually and on behalf of all others similarly situated, v. J.C. Penney & Co. Inc., et.al., is a securities class action suit filed in the Tyler Division of the Eastern District of Texas in 2013. The settlement was reached in April.
Alan B. Marcus, the lead plaintiff, claimed that investors who purchased shares in J. C. Penney’s stock in August and September 2013 became victims of false claims by the company regarding financial health and projections of financial liquidity.
The original complaint stated that “specifically, throughout the class period, defendants violated the federal securities laws by disseminating false and misleading statements to the investing public in connection with the company’s finances, assuring investors that the company had sufficient cash through year-end. As a result of defendants' false statements, J.C. Penney’s stock traded at artificially inflated prices during the class period, reaching a high of $14.47 per share on Sept. 9, 2013.”
Federal securities laws were violated, Marcus claimed.
Many large shareholders pulled out of the company in 2013, and stock prices dropped drastically.
Judge K. Nicole Mitchell reported in her 2014 response to a motion to dismiss that the press release investors relied on in 2013 included cautionary language, and the statements weren’t actionable unless they had been made without J. C. Penney knowing they were false.
In March, U.S. District Judge Robert Schroeder certified the class, after the magistrate judge’s recommendation.
Danielle S. Myers of Robbins Geller Rudman & Dowd LLP in San Diego represented the plaintiffs.
Michael E. Jones of Potter Minton PC in Tyler and Robert C. Walters, Meryl L. Young and Jason J. Mendro of Gibson Dunn& Crutcher of Dallas and Irvine, California represented J.C. Penney.
In February, J.C. Penney announced it would close more than 130 stores due to lagging sales.