Commitments and Contingencies

3 Months Ended

Oct. 29, 2011

Commitments and Contingencies

11. Commitments and Contingencies

On January 21, 2010, Tween Brands was sued in the U.S. District Court for the Eastern District of California.  This purported class action alleged, among other things, that Tween Brands violated the Fair Labor Standards Act by not properly paying its employees for overtime and missed rest breaks.  The parties agreed to a settlement of this wage and hour lawsuit.  The court granted final approval of the settlement on August 10, 2011.  The Company had previously established a reserve for this settlement.  During the first quarter of Fiscal 2012, the settlement funds were disbursed to Class Members, and the excess reserve was reversed into income. The effect of the settlement and the reversal of excess reserve was not material to the consolidated financial statements. 

In addition to the litigation discussed above, the Company is, and in the future may be, involved in various other lawsuits, claims and proceedings incident to the ordinary course of business.  The results of litigation are inherently unpredictable.  Any claims against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources.  The results of these lawsuits, claims and proceedings cannot be predicted with certainty.  However, the Company believes that the ultimate resolution of these current matters, including the matters discussed above, will not have a material effect on the Company’s consolidated financial statements taken as a whole.