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Court Drops Claims Against Great Wolf

MADISON, WI-A United States District Court dismisses the pending consolidated class-action complaint against the resort operator.

By Dana Dubriwny | Updated on June 15, 2006

MADISON, WI-The United States District Court of the Western District of Wisconsin has dismissed in its entirety the pending consolidated class-action complaint against Great Wolf Resorts Inc. alleging that the company violated securities laws. The initial claim was in regard to the company’s 2004 initial public offering and its July 2005 announcement that earnings fell short of expectations for the second quarter of 2005.

In July of last year, the company had a one-day stock price drop of 31% in after reporting a bigger-than-expected loss, which became the subject of a class-action securities fraud suit. Filed by Scott + Scott LLC of Colchester, CT, the class action parties included who bought Great Wolf stock from Dec. 14, the day before the company began trading, and July 28, when it reported its second-quarter earnings.

During that earnings report, the company reported a loss of $2.5 million, or 8 cents a share, which ultimately severed the initial stock price of $17 per share to $13.65 per share. Calling the loss “embarrassing,” CEO John Emery admitted it was more than twice the expected loss the company had anticipated.

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