Red Robin Gourmet Burgers, Inc., Litigation

The lawsuit alleges two sets of misrepresentations: (i) that Red Robin, CEO/Chairman (Michael Snyder), CFO (James McCloskey), Controller (Lisa Dahl) and Director (Dennis Mullen) made false statements concerning the adequacy of Red Robin's internal controls relating to use of chartered aircraft and travel and entertainment expenses and concealed that the CEO/Chairman received $1.25 million in perquisites that should have been disclosed as compensation; and (ii) that Red Robin, replacement CEO (Dennis Mullen) and replacement CFO (Katherine Scherping) provided investors false financial guidance for the third and fourth quarters of 2005 and made false statements concerning the adequacy of Red Robin's internal controls over financial reporting. The lawsuit claims that as a result of these false and misleading statements, the value of Red Robin stock was artificially inflated, and that investors who purchased Red Robin stock at these inflated prices were damaged. Defendants deny they did anything wrong.

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