NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (http://www.rgrdlaw.com/cases/kraftheinz/) today announced that a class action has been commenced on behalf of purchasers of The Kraft Heinz Company (NASDAQ:KHC) common stock during the period between May 4, 2017 and February 21, 2019 (the “Class Period”). This action was filed in the Western District of Pennsylvania and is captioned Walling v. The Kraft Heinz Company, et al.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Kraft Heinz common stock during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 24, 2019. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. You can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/kraftheinz/.
The complaint charges Kraft Heinz, certain of its current and former officers and 3G Capital, Inc., one of Kraft Heinz’s largest beneficial stockholders, with violations of the Securities Exchange Act of 1934. Kraft Heinz manufactures and markets food and beverage products in the United States, Canada, Europe and internationally. Kraft Heinz products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products.
The complaint alleges that, during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Kraft Heinz’s operations and financial condition. Specifically, defendants failed to disclose, among other things, that Kraft Heinz had been materially overstating the value of certain of its important product lines; that Kraft Heinz’s intangible assets, including goodwill, associated with, at least, its Kraft natural cheese, Oscar Mayer cold cuts, and U.S. Refrigerated and Canadian retail businesses were materially impaired; that Kraft Heinz had been employing improper accounting policies and procedures associated with its procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with its vendors; that Kraft Heinz had been improperly accounting for the costs of products sold; and that Kraft Heinz had been operating with material weaknesses in its internal controls over financial reporting, including controls related to the accounting and disclosure of new accounting standards, its cost of products sold, its procurement function, the impairment of goodwill and the impairment of intangible assets. As a result of this information being withheld from the market, Kraft Heinz stock traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $93 per share.
Then on February 21, 2019, Kraft Heinz announced its financial results for the fourth quarter of 2018, including an impairment charge of $15.4 billion. The Company stated that, “[d]uring the fourth quarter, . . . [it had] concluded that, based on several factors that developed during the fourth quarter, the fair values of certain goodwill and intangible assets were below their carrying amounts. As a result, the Company recorded non-cash impairment charges of $15.4 billion to lower the carrying amount of goodwill in certain reporting units, primarily U.S. Refrigerated and Canada Retail, and certain intangible assets, primarily the Kraft and Oscar Mayer trademarks. These charges resulted in a net loss attributable to common shareholders of $12.6 billion and diluted loss per share of $10.34.” The same day, Kraft Heinz disclosed that it had received a subpoena in October 2018 from the SEC “associated with an investigation into the Company’s procurement area, more specifically the Company’s accounting policies, procedures, and internal controls related to it procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with vendors.” On these disclosures, the price of Kraft Heinz stock fell $13.23 per share, or more than 27%, to close at $34.95 per share on February 22, 2019.
Plaintiff seeks to recover damages on behalf of all purchasers of Kraft Heinz common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is a national law firm representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also advocates for corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.
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