Checkers Drive-In Restaurants Inc. (Nasdaq: CHKR) has announced a summary judgment win in the securities class action filed against Rally’s Hamburgers in the W.D. of Kentucky. (Rally was acquired by Checkers in 1999). The suit was based on conduct that took place in the early 1990s.
Judge Simpson found that the plaintiffs would not be able to establish fraudulent intent and that certain analyst evaluations of the company’s challenged statements “counterbalanced any misleading effect those statements might have had on the market.” (The opinion actually can be found on Checkers’ website.)
Quote of note (opinion): “[I]n this case, as in others, the claims of wrongdoing are based upon a fiction that poor management constitutes fraud if a company’s plans for continued growth do not succeed.”