On May 3, 2019, Labaton Sucharow, as lead counsel, secured final approval of an $11 million settlement in a securities class action against Rent-A-Center, one of the largest rent-to-own operators in North America, and its former CEO and CFO. Rent-A-Center denied liability throughout the litigation.
The settlement resolves claims alleged by the plaintiffs that the defendants made materially false and misleading statements and omitted material information regarding its new proprietary point-of-sale information management system, SIMS. SIMS, which was described by defendants as “critical to supporting our growth,” was designed to centralize and manage sales, inventory, collections, customer relationship management, and payment tracking on a company-wide basis. Several of the company’s strategic initiatives, including centralized inventory management, e-commerce, and variable pricing, relied on the successful implementation of SIMS. According to the complaint, throughout the class period, defendants failed to disclose to investors that SIMS had a history of ongoing stability and functionality problems.
On December 14, 2017, the U.S. District Court for the Eastern District of Texas denied defendants’ motion to dismiss.
The case is Hall v. Rent-A-Center, Inc., No. 16-cv-0978 (E.D. Tex.). The Firm represented lead plaintiff Oklahoma Firefighters Pension and Retirement System, named plaintiff City of Hollywood Employees’ Retirement Fund, and the class. The Labaton Sucharow team included Partners Jonathan Gardner, Christine Fox, and Marisa DeMato, and associate Ross Kamhi.