ShopKo Securities Litigation

Beginning on October 11, 2001, five class actions were filed in this Court charging Defendants with artificially inflating the market price of ShopKo common stock in violation of the federal securities laws. On March 31, 2002, the Court consolidated the lawsuits and appointed Christopher Peterson and Market Street Investments L.P. as Lead Plaintiffs and the law firms of Berger & Montague, P.C. and Lowey Dannenberg Bemporad & Selinger, P.C. as Co-Lead Counsel.

On April 10, 2002, plaintiffs filed the Consolidated Class Action Complaint (the "Initial Complaint"), which alleged, inter alia, that Defendants misled the marketplace about ShopKo’s business operations by repeatedly touting the successful integration of its newly acquired Pamida division and its expanded distribution network. The Initial Complaint alleged that in fact, Pamida was plagued with distribution problems that continued to worsen since its expanded warehouse in Lebanon, Indiana reopened in July 2000, which delayed the flow of merchandise to Pamida stores.

On November 9, 2000, the close of the Class Period, the Company had disclosed that it would report a loss for the third quarter of 2000, not a profit as forecasted just a few weeks earlier. Defendants further disclosed that certain operational inefficiencies with Pamida’s distribution system had contributed to ShopKo’s financial downturn. Following the November 9, 2000 announcement, the market price of ShopKo common stock declined.

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