Proposed FACTA Settlement

On or about July 20, 2007, Kathy Aliano (“Plaintiff”), as the named plaintiff and as a representative on behalf of all members of a purported class, asserted that Hancock Fabrics, Inc. (“Hancock”) violated certain requirements imposed by the Fair and Accurate Credit Transactions Act (“FACTA”). Specifically, Plaintiff asserts that Hancock printed more than the last five digits of its customers’ credit or debit card numbers and/or the expiration date of its customers’ credit or debit cards on receipts presented to them at its retail stores, in violation of FACTA, as specifically set forth in the Complaint filed on July 20, 2007, as subsequently amended on or about January 7, 2008. To see the amended Complaint, please click here.

On or about January 7, 2008, Hancock and Plaintiff, on behalf of herself and all members of the purported class, entered into a settlement agreement (the “Agreement”), settling the purported class action. To see the Agreement, please click here. Under the terms of the Agreement, Hancock will, among other things, hold a Sale Event at all of its regularly operating retail store locations on May 26, 2008, for the benefit of class members, at which any person making a purchase transaction will receive an automatic discount of ten percent (10%) off the total purchase price. The settlement also imposes certain other requirements, which are set forth in detail in the Agreement. Both the Equity Committee and Creditors' Committee appointed in Hancock's chapter 11 bankruptcy case support the settlement.

On or about January 7, 2008, Hancock filed a motion (the “Motion”) requesting preliminary and final approval of the settlement of the purported class action, as set forth in the Agreement. To see the Motion, please click here. On January 22, 2008, the Bankruptcy Court preliminarily approved the settlement embodied in the Agreement as fair, adequate and reasonable. To see the order preliminarily approving the settlement, please click here. If finally approved, the settlement will certify a class that will bind Plaintiff and all class members who do not exclude themselves from the class. The hearing for final approval of the settlement is scheduled for April 17, 2008.

To learn more about the proposed settlement and your legal rights, please review the Notice of Certified Class Action Settlement, which can be obtained by clicking here.