No Rest or Relaxation for Great Wolf Resorts Inc.: Scott + Scott, LLC Files New Securities Fraud Complaint

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Firm That Filed Original Complaint Adds Nine New Defendants.

earnings before interest, taxes, depreciation, and amortization

COLCHESTER, Conn., Dec. 9 -- Scott+Scott, LLC ( filed a new securities fraud complaint class action today in the United States District Court for the Western District of Wisconsin (05-C-0687-C) against Great Wolf Resorts Inc. ("Great Wolf" or the "Company").

Scott + Scott's new complaint adds parties including: Citigroup Global Markets, Inc., A.G. Edwards & Sons Inc., Raymond James & Associates Inc., Calyon Securities (USA), Societe Generale, ThinkEquity Partners, LLC, Rubin Brown Gornstein & Co., LLP, and Deloitte and Touche. The complaint seeks to represent all of those investors who purchased or acquired Great Wolf securities between December 14, 2004, and July 28, 2005, inclusive (the "Class Period"), but any purchaser of Great Wolf securities may contact the firm as this class period can change as information is revealed.

Great Wolf owns, operates, and develops drive-to family resorts featuring indoor water parks and other family-oriented entertainment activities. The Company is headquartered in Madison, Wisconsin.

Scott+Scott's complaint alleges that defendants' registration statements issued in connection with the Company's 2004 Initial Public Offering ("IPO") contained untrue statements of material fact. According to the complaint, the Company provided misleading, unreliable and unpredictable quarterly and annualized guidance based on its preferred non-GAAP EBITDA measure. Since defendants' EBITDA number was allegedly unreliable, both the Company's business prospects and in fact the value of the underlying business was in doubt because the value of the Company was based on a defective valuation measure. It is alleged that the Company used this defective measure to convince investors to buy the Company's stock during the IPO.

EBIDTA, which stands for "earnings before interest, taxes, depreciation, and amortization" is a measure of cash flow. However, according to Richard McCaffrey of the Motley Fool, EBIDTA is of "fairly limited usefulness." See Motley Fool's July 16, 2002 article on the subject.

On July 28, 2005, the Company's stock price sank as investors' learned the true magnitude of the Company's earnings shortfall and its cause -- the alleged unreliability of defendants' EBITDA projections. Worse, analysts concluded that defendants were fully aware of the true magnitude of the earnings miss when they were out marketing clients at the end of June but failed to publicly disclose the materiality of the problem at that time. According to the Associated Press, analysts point to the Company's inability to handle the increased competition, saying it contributed to other problems, such as a second-quarter earnings miss and questions about the company's internal controls. On the news of July 28, 2005, the price of the Company's stock plunged $6.12 to $13.65, on extremely heavy volume. The price has continued to decline since July and today trades at $10.37.

Scott+Scott, LLC, has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Cases currently being litigated and/or investigated by Scott+Scott, LLC include: Refco, Inc.; Guidant Corp.; Abbott Laboratories; Halliburton; TRM Corp.; and Tempur-Pedic Int'l, Speedway Motorsports, Shanda Interactive, and Photronics among others. Its success has brought shareholders hundreds of millions of dollars in cases against Mattel, Royal Dutch/Shell, Sprint, ImClone, and others.

If you wish to discuss this action or have questions concerning this notice or your rights as a class member, please contact Scott+Scott for more information. Scott+Scott will provide class members with case materials, answer all questions regarding participation and rights and assist with other services the firm provides. There is no cost or fee to you. Contact Scott+Scott partners Neil Rothstein 800/332-2259, ext. 22 or cell 619/251-0887 or David R. Scott 800/404-7770. Institutional Investors may also contact the firm.


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