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Campbell Soup Company

CASE CAPTION Marder v. Campbell Soup Company et al
COURT United States District Court for the District of New Jersey
CASE NUMBER 1:2018-cv-14385 (NLH)
JUDGE Honorable Noel L. Hillman
PLAINTIFF Oklahoma Firefighters Pension and Retirement System
DEFENDANTS Campbell Soup Company, , Denise Morrison, and Anthony DiSilvestro
CLASS PERIOD August 31, 2017 through May 17, 2018

This securities fraud class action case arises out of Defendants’ materially misleading statements and omissions regarding Campbell’s ability to deliver “profitable growth” in its fresh foods division, Campbell Fresh (“C-Fresh”), which included the Bolthouse Farms brand acquired by Campbell for $1.55 billion in 2012.

During the Class Period, Defendants consistently provided fiscal 2018 (“FY 2018”) growth projections for C-Fresh, including touting “product innovations” in the Bolthouse beverage business that Defendants claimed would drive profitability in C-Fresh. However, adverse facts known to Defendants, but concealed from investors, showed that growth in C-Fresh was unrealistic and unattainable.

In reality, because of a nationwide beverage recall and associated production declines, leading into FY 2018 C-Fresh lost critical shelf space when its largest supermarket chain customers, including at least Target, Walmart, Kroger, and Albertsons, excluded Bolthouse products from their “Modular Resets,” which are infrequent periodic shelf space allocations made by retailers to determine which products they will carry on store shelves until the next Modular Reset occurs, and replaced Bolthouse beverages with competitor products including Naked Juice (PepsiCo.), Odwalla Juice (Coca-Cola), Suja Juice and GT Kombucha. The exclusion of Bolthouse products from the Modular Resets foreclosed valuable shelf space at, and associated revenues from, at least Target, Walmart, Kroger, and Albertsons, and made sales growth at these customers impossible in FY 2018.

Oklahoma Firefighters filed a 124-page amended complaint in January 2021 on behalf of a putative class of investors alleging that Campbell and its former executives, including CEO Denise Morrison and CFO Anthony DiSilvestro, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements and concealing material facts about Campbell’s ability to deliver “profitable growth” in C-Fresh and violated Item 303 of Regulation S-K by failing to disclose known material adverse trends which increased the risk of an impairment charge in the Bolthouse beverage business. As alleged, following the revelation that Campbell was taking a $619 million non-cash impairment charge on C-Fresh, with $514 million attributable to the Beverage and Salad Dressing unit, Campbell’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

Defendants’ motion to dismiss is fully briefed and pending before the Honorable Noel L. Hillman.