Kohls (KSS) Securities Fraud Class Action Lawsuit
Kohl's (KSS) securities fraud class action summary
In 2012, Kohl's had to restate their financial statements as the method Kohls used to properly account of capital improvements for the leased Kohl's stores throughout the United States. This revelation caused KSS shareholders to lose over $2.6 billion in KSS market value. This securities fraud class action against Kohl's then addresses the question of whether senior executives at Kohl's knew of these accounting problems and failed to properly disclose the problems to KSS investors.
Allegations contained in Kohl's securities fraud class action lawsuit
Kohl's operates over 1200 stores through out the United States. Kohl's leases 65% of those stores. The lease agreements typically call for a fixed annual lease payments and on occasion an increased lease payment should Kohl's sales hit pre-established sales goals. In August, 2011, Kohl's disclosed to shareholders that it would need to restate its financials because in part the method for accounting for capital improvements in leased stores was materially incorrect. The securities fraud class action alleges that Kohl's:
- reported debt was materially understated;
- reported equity was materially overstated;
- leverage ratios were materially understated;
- the financial statements issued were materially false and misleading; and
- violated standards of accounting associated with regards to disclosure of leases.
KSS shareholders lose $2.6 billion in less than 2 months.
On July 25, 2011 KSS stock traded at a high of $57. By September 13, 2011, KSS stock hit a low of $43.50. That is almost a $2.76 billion loss in market value for Kohl's shareholders, some of which could have been attribute to the disclosure of improper accounting methods.
Kohl's (KSS) securities fraud lawsuit investigation
This investigation focuses on the underlying facts relating to the allegations set forth above. Did Kohl's properly disclose to investors the true state of its business operations during the class period or did senior executives knowingly overstate those prospects? A fair question given that company insiders sold almost $50,000,000 in KSS stock during the class period. Complete the web form on this page if you are a Kohl's shareholder and would like to learn more about our investigation.
Lead Plaintiff Date:
Monday, September 23, 2013
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