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MANZO v RITE AID CORP Click to find out why . . .



Keywords & Phrases
CaseNo: C.A. No. 18,451, CourtCode: CC, CourtName: IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE, Plaintiff: MANZO, State: DE Delaware, UniqueCaseRef: DE>CC>00018451, Rite Aid, Kpmg, Holder Class, Fraud Claim, Rite Aid Stock, Individual Defendants, Delaware, Stores, Del, Prior, Fiduciary Duty, Dismiss, Financial Statements, Common Stock, Earnings, Report, Class Action, Support, Directors, Financials, Misrepresentations, Chancery, Complaint, Common Law, Damages, Financiali, Rite Aid Corporation, Securities, Materially False, Misleading, Grass, Stockholders, Net Income, Accounting Practices, Eastern District, Annual Report, Stock, Representations, Fraud , ContentID: 120240055

Case Documents
1 2001-11-15 [AMENDED] CLASS ACTION COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 127008
141 pages
PDF
2 2001-01-16 BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS
[ see first page and extracted highlights below  ] ItemID: 102260
45 pages
PDF
3 2001-01-15 BRIEF OF DEFENDANT F. BROWN IN SUPPORT OF MOTION TO DISMISS
[ see first page and extracted highlights below  ] ItemID: 102262
9 pages
PDF
4 2001-01-15 BRIEF IN SUPPORT OF RITE AID AND OTHERS MOTION TO DISMISS
[ see first page and extracted highlights below  ] ItemID: 102261
57 pages
PDF
5 2000-10-25 CLASS ACTION COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 100763
105 pages
PDF
Total Documents: 5 documents , 357 pages
Price: $ 39.95


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1 . [AMENDED] CLASS ACTION COMPLAINT

EXTRACTED KEY WORDS
DEFENDANTS
HOLDER CLASS
KPMG
RITE AID STOCK
INDIVIDUAL DEFENDANTS
PLAINTIFF
STORES
FINANCIALS
PRIOR
COMMON STOCK
FINANCIAL STATEMENTS
EARNINGS
REPORT
ATTORNEY
PRACTICES
MATERIALLY FALSE
MISREPRESENTATIONS
MISLEADING
ACCOUNTING PRACTICES
FIDUCIARY DUTY
NET INCOME
ANNUAL REPORT
REPRESENTATIONS
STOCKHOLDERS
OPERATING EXPENSES
MANAGEMENT
DISTRIBUTION
DRUG STORE
PRESCRIPTION
                                                                                .--_              _
                                                                                GINAL b
              IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE


                         IN AND FOR NEW CASTLE COUNTY

                                                                                         -. f
STACEY FEINGLASS MANZO on behalf of )
herself and all others similarly situated,
                                                   i                                     _ .
                              Plaintiff,                                                 :.' :
       V.                                          i      C.A. No. 18451-NC.             :-:

RITE AID CORPORATION, a Delaware
corporation, MARTIN L. GRASS, TIMOTHY )                                                     3
J. NOONAN, FRANKLIN C. BROWN,
NANCY A. LIEBERMAN, LEONARD                        ;
STERN, PRESTON R. TISCH, WILLIAM                   )
J. BRATTON, and KPMG LLP,                          >

                              Defendants.          1


                           [Amended] Class Action Complaint

       Plaintiff, by and through her attorneys, on behalf of herself and all others

similarly situated, complains against Defendants as follows:

                                   Nature Of The Action

        1.       Plaintiff brings this action as a class action on behalf of herself and all

other persons who held common stock of Rite Aid Corporation ("Rite Aid" or the

"Company") from prior to March 1, 1997 through and including October 18, 1999

(the "Holder Class Period"), to recover damages caused by defendants'

misrepresentations, fraud, breach of fiduciary duty (individual defendants only) and

aiding and abetting a breach of fiduciary duty (KPMG only). This case is not

brought on behalf of buyers or sellers of Rite Aid stock; it is brought on behalf of
17594.1\131613v1



SNIPPETS:
  • RITE AID CORPORATION, a Delaware
  • Plaintiff brings this action as a class action on behalf of herself and all
  • "Company") from prior to March 1, 1997 through and including October 18, 1999
  • to recover damages caused by defendants'
  • aiding and abetting a breach of fiduciary duty.
  • stockholders who owned Rite Aid stock during the entire Holder Class Period.
  • As a result of defendants' misrepresentations and other wrongful
  • and financial performance not misleading.
  • the financial statements and financial information that Rite Aid reported to
  • The Company's earnings for fiscal
  • improper and illegal business and employment practices.
  • Rite Aid, through its subsidiaries, owns and operates 3,900 retail drug stores in 38
  • Company has also engaged in pharmacy benefits management,
  • Rite Aid has outstanding over 250 million shares of common stock which are traded
  • the "Individual Defendants."
  • sales were not true but rather were materially false and misleading.
  • Defendant KPMG LLP is an international accounting firm.
  • representations contained in these annual reports and the representations made by
  • and scheme to inflate reported net income during the fiscal years described herein.
  • the financial statements contained in the annual report lent substantial assistance
  • It is one of the nation's largest drug store retailing chains with
  • management, the marketing of prescription plans, and the selling of other
  • larger, more modern and highly automated distribution warehouses, and
  • Rite Aid's and the other defendants' improper accounting practices
  • (4 Understating expenses by capitalizing project costs related to store planning, development
  • the Florida Attorney General announced that he was suing Rite Aid for $2 bilhon in
  • Rite Aid to temporarily improve its bottom line and make its financials look

  • 2 . BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS

    EXTRACTED KEY WORDS
    DEFENDANTS
    KPMG
    DELAWARE
    PLAINTIFF
    DISMISS
    CLASS ACTION
    CHANCERY
    RITE AID
    FIDUCIARY DUTY
    LAW
    COMPLAINT
    DEL
    INDIVIDUAL DEFENDANTS
    EASTERN DISTRICT
    FRAUD
    SECURITIES
    PENNSYLVANIA
    LLP
    COMMON LAW
    FINANCIAL STATEMENTS
    RITE AID STOCK
    LITIGATION
    ALLEGATIONS
    CONSIDERATIONS
    ACTION PENDING
    SHAREHOLDERS
    HOLDER CLASS PERIOD
    UNITED STATES
    PLAINTIFF ALLEGES
    
                  IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                                  IN AND FOR NEW CASTLE COUNTY
    
    STACEY FEINGLASS MANZO  on behalf                  )
    of herself and all others similarly situated,
                                                       i
                            Plaintiffs,                ) CIVIL ACTION NO. 18451-NC  a
                                                                                    2'
            V.                                         i                          &          Ir;
                                                                                  es         -z      -%q
                                                                                  SW         .c      -
    RITE AID CORPORATION, MARTIN L.                     ;                          pl2?      Ia      s--
    GRASS, TIMOTHY J. NOONAN,                                                      F 5.              :m
                                                                                   3.Z-n      -0     
    FRANKLIN C. BROWN, NANCY A.                         ,'                         %!ii,      -f:
    LIEBERMAN, LEONARD STERN,                                                       wzi
    PRESTON R. TISCH, WILLIAM .I.                       ;                           PIfm       -
                                                                                    -3         N
    BRATTON, and KPMG LLP,
                                                        ;
                            Defendants.                 >
    
                        BRIEF IN SUPPORT OF DEFENDANT KPMG LLP'S
                  MOTION TO DISMISS THE CLAIMS DIRECTED AGAINST IT
                  OR IN THE ALTEBNATIVE. TO STAY THE PRESENT ACTION
    
    
                                                     Montgomery, McCracken, Walker & Rhoads,  LLP
                                                     John H. Newcomer, Jr.
                                                     13 1 Continental Drive, Suite 304
                                                     Newark, DE 19713
                                                     (302) 894-7070
                                                     Attorneys for Defendant KPMG LLP
    
    OF COUNSEL:
    John W. Frazier, IV
    John E. Caruso
    Montgomery, McCracken, Walker & Rhoads, LLP
    123 South Broad Street
    Philadelphia, PA 19109
    (215) 772-1500
    
    Dated: January  16,200l
    
    
    
                                                                                         TABLE OF
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • BRIEF IN SUPPORT OF DEFENDANT KPMG LLP'S
  • MOTION TO DISMISS THE CLAIMS DIRECTED AGAINST IT
  • Attorneys for Defendant KPMG LLP
  • Plaintiffs Equitable Fraud and Common Law Fraud Claims Are
  • Not Properly Assertable in a Class Action.
  • This Court Should Dismiss AI1 of the Claims Because Plaintiff Seeks Lost
  • Fiduciary Duty Claims as Valid Under the Securities Litigation Uniform
  • Aiding and Abetting the individual Defendants' Breaches of Fiduciary
  • F. The Instant Action Should be Dismissed or Stayed Based on Prior-Pending, Substantially
  • The Consolidated Actions in the Eastern District of Pennsylvania
  • Considerations of Comity and the Necessities of an Orderly and

  • 3 . BRIEF OF DEFENDANT F. BROWN IN SUPPORT OF MOTION TO DISMISS

    EXTRACTED KEY WORDS
    RITE AID
    BROWN
    DEL
    DEFENDANT FRANKLIN
    DAMAGES
    MOTION
    COMPLAINT
    SUPR
    SUPPORT
    DISMISS
    DELAWARE
    RITE AID CORPORATION
    WILLIAM
    NORTH MARKET
    CLASS MEMBERS
    MARKET STREET STERN
    CORROON LLP
    RITE AID STOCK
    DERIVATIVELY6
    LIEBERMAN
    LEONARD STERN
    POTTER ANDERSON
    COUNSEL
    HERCULES PLAZA
    GREENBERG
    LIVINGSTON AVENUE
    WILMINGTON
    ROSELAND
    ATTORNEYS
    
                 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                                 IN AND FOR NEW CASTLE COUNTY                               /I
    
    STACEY FEINGLASS MANZO on behalf of           )
    herself and all others similarly situated,
                                                  ;
                                Plaintiff,                  C.A. No. 18451 NC
                                                  1
    V.
    
                                                  I
    RITE AID CORPORATION, a Delaware              1
    corporation, MARTIN L. GRASS, TIMOTHY J. )
    NOONAN,  FRANKLIN C. BROWN, NANCY )
    A. LIEBERMAN, LEONARD STERN,                  1
    PRESTON R. TISCH, WILLIAM J.  BRATTON, )
    and KPMG LLP,
                                                  !
                                Defendants.       1
    
    
    
                          BRIEF OF DEFENDANT  FRANKLJN  C. BROWN
                             IN SUPPORT OF HIS MOTION TO DISMISS
    
    
    
    
                                                       POTTER ANDERSON  &  CORROON  LLP
    OF COUNSEL:                                          Hercules Plaza, Sixth Floor
                                                         13 13 North Market Street
    Stern & Greenberg                                    P.O. Box 951
    75 Livingston Avenue                                 Wilmington, Delaware 19899
    Roseland, NJ 07068                                   (302) 984-6000
    (973) 535-1900
                                                       Attorneys for Defendant Franklin C. Brown
    January  15,200l
    
    
    451470
    
    
    
                                                                                                    
    
    
    INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • Plaintiff,
  • I RITE AID CORPORATION, a Delaware
  • PRESTON R. TISCH, WILLIAM J. BRATTON,) and KPMG LLP,
  • BRIEF OF DEFENDANT FRANKLJN C. BROWN
  • IN SUPPORT OF HIS MOTION TO DISMISS
  • POTTER ANDERSON & CORROON LLP OF COUNSEL:
  • Hercules Plaza, Sixth Floor
  • 13 13 North Market Street Stern & Greenberg
  • P.O. Box 951 75 Livingston Avenue
  • Wilmington, Delaware 19899 Roseland, NJ 07068
  • Attorneys for Defendant Franklin C. Brown January 15,200l
  • Caused Her Any Legally Cognizable Damages Requires Dismissal,
  • Williams and Liguori, Del.
  • Supr., 262 A.2d 246.

  • 4 . BRIEF IN SUPPORT OF RITE AID AND OTHERS MOTION TO DISMISS

    EXTRACTED KEY WORDS
    RITE AID
    FRAUD CLAIM
    COURT
    DELAWARE
    DIRECTORS
    DEL
    SUPPORT
    DAMAGES
    RITE AID CORPORATION
    COMMON LAW
    STOCK
    FAILURE
    FIDUCIARY DUTY
    ALLEGE
    RELIANCE
    EQUITABLE FRAUD
    FALSE STATEMENTS
    SHAREHOLDERS
    DEFENDANTS
    DISCLOSURE
    STOCK PRICE
    KPMG
    ALLEGATIONS
    SECURITIES
    STOCKHOLDER
    ACCOUNTING
    SUPREME COURT
    LEONARD STERN
    DIRECTORS DELIBERATELY MISINFORM
    
                  IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                                IN AND FOR NEW CASTLE COUNTY
    
    
    ___---------m-w                                 ----x
    
    STACEY FEINGLASS MANZO, on behalf of
    herself and all others similarly situated,
    
                                      Plaintiff,
    
            V.                                                     Civil Action No. 1845 l@z
                                                                                            ?-G
                                                                                            ::. ..:
    RITE AID CORPORATION, a Delaware                                                        Z.`  ..:
                                                                                            :-. : ,; 1
    corporation, MARTIN L. GRASS, TIMOTHY J.                  :                             -> __
                                                                                            :-- :. -
    NOONAN, FRANKLIN C. BROWN, NANCY A.                       :
    LIEBERMAN, LEONARD STERN, PRESTON R.                      :
    TISCH, WILLIAM J. BRATTON, and KPMG LLP, :
    
                                      Defendants.
    ----~--~----.-------~
    
                        BRIEF IN SUPPORT OF RITE AID CORPORATION,
                  NANCY A. LIEBERMAN, LEONARD STERN, PRESTON R. TISCH
                      AND WILLIAM J. BRATTON'S MOTION TO DISMISS
    
    
                                                     SKADDEN, ARPS, SLATE,
                                                        MEAGHER & FLOM LLP
                                                     One Rodney Square
                                                     Post Office Box 636
                                                     Wilmington, Delaware 19899-0636
                                                     (302) 651-3000
    
                                                     Attorneys for Rite Aid Corporation,
                                                     Nancy A. Lieberman, Leonard Stem,
                                                     .Preston R. Tisch and William J. Bratton
    Of Counsel:
    
    WACHTELL, LIPTON, ROSEN  & KATZ
    5 1 West 52"d Street
    New York, New York 10019-6150
    Attorneys for Nancy A. Lieberman, Leonard Stem,
    Preston R. Tisch and William J. Bratton
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • TISCH, WILLIAM J. BRATTON, and KPMG LLP,:
  • BRIEF IN SUPPORT OF RITE AID CORPORATION,
  • NANCY A. LIEBERMAN, LEONARD STERN, PRESTON R. TISCH
  • DISMISSED FOR FAILURE TO STATE A CLAIM
  • Plaintiff Has Not Alleged All Of The Elements Of A Common Law
  • Plaintiff has not alleged actual reliance.
  • Directors had knowledge of false statements
  • Plaintiff Has Failed To State A Claim For Equitable Fraud.
  • Plaintiff has failed to allege the elements of equitable fraud
  • No damages can be granted against the Outside Directors
  • PLAINTIFF'S BREACH OF FIDUCIARY DUTY CLAIM MUST BE
  • Disclosure Claim Under Malone v. &&at.
  • Deliberately Published False Statements
  • Or Sale Of Securities,
  • In re Baxter Int'l, Inc. S'holders Litig., Del.

  • 5 . CLASS ACTION COMPLAINT

    EXTRACTED KEY WORDS
    DEFENDANTS
    HOLDER CLASS
    RITE AID STOCK
    KPMG
    INDIVIDUAL DEFENDANTS
    PLAINTIFF
    STORES
    PRIOR
    FINANCIALI
    COMMON STOCK
    GRASS
    ATTORNEY
    EARNINGS
    FINANCIAL STATEMENTS
    REPORT
    MISREPRESENTATIONS
    STOCKHOLDERS
    MISLEADING
    NET INCOME
    FIDUCIARY DUTY
    ANNUAL REPORT
    ACCOUNTING PRACTICES
    REPRESENTATIONS
    MATERIALLY FALSE
    DISTRIBUTION
    ACQUISITION
    DRUG STORE
    MANAGEMENT
    INTERNAL CONTROLS
    
                                                                                                  I
         IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE
    
                          IN AND FOR NEW CASTLE COUNTY
    
    
    STACEY FEINGLASS MANZO on behalf of )
    herself and all others similarly situated,
                                                    1
                               Plaintiff,
          V.                                        1      C.A. No.1 %45/h'L
                                                    >
    RITE AID CORPORATION, a Delaware                )
    co:rporation,  MARTIN L. GRASS, TIMOTHY )
    J. NOONAN, FRANKLIN C. BROWN,                   >
    NANCY A. LIEBERMAN, LEONARD
    STERN, PRESTON R. TISCH, WILLIAM                i
    J. BRATTON, and KPMG LLP,
                                                    i
                                Defendants.         >
    
    
                                   Class Action Complaint
    
           Plaintiff, by and through her attorneys, on behalf of herself and all others
    
    similarly situated, compla.ins  against Defendants as follows:
    
                                    Nature Of The Action
    
           1.    Plaintiff brings this action as a class action on behalf of herself and all
    
    ot.her persons who held common stock of Rite Aid Corporation ("Rite Aid" or the
    
    "Company") from prior to March 1, 1997 through and including October 18, 1999 (the
    
    "Holder Class Period"), to recover damages caused by defendants' misrepresentations,
    
    fraud, breach of fiduciary duty (individual defendants on1t.y) and aiding and abetting
    
    a breach of fiduciary duty (KPMG only). This case is not `brought on behalf of buyers
    
    o P sellers of Rite Aid stock; it i-s brought on behalf of stockholders who owned Rite Aid
    
    
    
    stock during the entire Holder Class Period. During the period from March 1, 1997
    
    through October 18, 1999, defendants issued and caused to be disseminated to the
    
    SNIPPETS:
  • Plaintiff, by and through her attorneys, on behalf of herself and all others
  • ot.her persons who held common stock of Rite Aid Corporation ("Rite Aid" or the
  • "Company") from prior to March 1, 1997 through and including October 18, 1999 (the
  • "Holder Class Period"), to recover damages caused by defendants' misrepresentations,
  • breach of fiduciary duty and aiding and abetting
  • a breach of fiduciary duty (KPMG only).
  • P sellers of Rite Aid stock; it i-s brought on behalf of stockholders who owned Rite Aid
  • certifying the accuracy of these financial statements all of which falsely portrayed Rite
  • earnings and resultant financial condition
  • and financial performance not misleading.
  • statements and financiali information that Rite Aid reported to unsuspecting
  • Aid, through its subsidiaries, owns and operates 3,900 retail drug stores in 38 states.
  • 250 million shares of common stock which are traded on the New York Stock
  • Defendant Martin L. Grass was Chairman of the Board,
  • "Individual Defendants."
  • operations, business, products, markets, management, revenues, earnings and present
  • statements as well as the Company's internal controls ancl structures.
  • in these annual reports and the representations made by defendant KPMG.
  • materially false and misleading reports on the financial statements of Rite Aid for the
  • inflate reported net income during the fiscal years described herein.
  • contained in the annual report lent substantial assistance to and aided the individual
  • highly automated distribution warehouses, and replac:i.ng several hundred of its
  • in integrating its newly acquired drug store chains,
  • Rite Aid's and the other defendants' improper accounting practices
  • government investigation u&l September 1999 when-after the Florida Attorney
  • 1999 acquisition of PCS with tine proceeds of a secondary ofFering of artificially inflated
  • On or about May 2, 1997, Rite Aid issued its 1997 Annual Report to
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