The Finish Line has received a grand jury subpoena from the Office of the U.S. Attorney for Southern District of New York to produce documents relating to its merger with Genesco. The Finish Line is not required to testify at the grand jury investigation if these documents are produced and the company is in the process of complying with the subpoena. The Finish Line does not believe that the company or its executives are targets of the investigation.
The Finish Line has provided notice to Genesco that the ongoing investigation by the U.S. Attorney of alleged violations of federal fraud statutes in connection with the Merger, and the probable consequences that will follow from the investigation and the alleged violations that are the subject of the investigation (including attendant costs, business disruption, expected civil litigation, a possible SEC investigation, potential liability, and costs and injury to Genesco's business resulting therefrom) constitute a material breach of their merger agreement. The Finish Line also stated in the notice that these violations constitute a company Material Adverse Effect and, unless cured in accordance with the terms of the agreement, will cause a condition precedent to The Finish Line's obligation to close the Merger to fail.
