ST. PAUL, Minn. (Legal Newsline) - Investors are suing Target and two of its chief officers, alleging it misled investors over its Canadian operations.
Salvatore Rizzo, individually and for all others similarly situated, filed a class action lawsuit May 24 in
U.S. District Court for the District of Minnesota
against Target Corporation, Gregg W. Steinhafel and John J. Mulligan, alleging violations of the Securities Exchange Act.
On Jan. 13, 2011, Target announced it would expand its retail operations into Canada.
From Feb. 27, 2013 to May 19, 2014, according to the suit, the defendants misled investors and made a series of false reassuring statements regarding Target's Canadian operations.
Specifically, the complaint states, the defendants failed to disclose that the new stores had significant problems with supply chain infrastructure, distribution centers and technology systems, as well as inadequately trained employees, which caused significant issues, including excess inventory and distribution centers and inadequate inventory at retail locations, which in turn forced Target to steeply discount products and incur heavy losses.
The lawsuit states Target assured investors the Canadian stores' poor performance was similar to the growing pains experienced by new stores opened in the U.S.
On May 20, 2014, prior to the trading session, news reports circulated that Target had fired its president of Canadian operations, Tony Fisher, whose abrupt termination revealed that the weak results from Target's Canadian operations were not normal.
As a result, Target stock declined, damaging investors, the suit says.
Rizzo and others in the class seek a jury trial, damages and interest, attorney fees and costs, and any other equitable and injunctive relief awarded by the court. They are represented by attorneys Gregg M. Fishbein and Kate M. Baxter-Kauf of Lockridge Grindal Nauen in Minneapolis, Jeremy A. Lieberman, J. Alexander Hood, II, Marc C. Gorrie and Patrick V. Dahlstrom of Pomerantz LLP in New York and Chicago, and by Peretz Bronstein of Bronstein Gewirtz & Grossman in New York.
U.S. District Court for the District of Minnesota Case number 16-CV-01485-WMW-TNL