Kessler Topaz Meltzer & Check, LLP (“Kessler Topaz”), as Co-Lead Counsel, is currently litigating a class action in the United States District Court for the Northern District of Illinois on behalf of persons or entities who purchased or otherwise acquired securities of The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the “Company”) during the period from November 5, 2015 to August 7, 2019, inclusive (the “Class Period”). On August 14, 2020, Kessler Topaz filed an amended complaint in the action.
The Alleged Wrongful Conduct
As alleged in the complaint, Kraft Heinz is one of the largest food and beverage companies in the world. This securities class action arises from Defendants’ materially false and misleading statements and omissions concerning the most important question investors had for Kraft Heinz’s executives during the Class Period: whether the Company’s cost-cutting initiatives following the 2015 acquisition of Kraft Foods Group, Inc. (“Kraft”) by The H.J. Heinz Company (the “Merger”) were “sustainable,” i.e., was Kraft Heinz achieving the outsized savings it repeatedly touted solely by eliminating waste and redundancy, and was the Company investing those savings to further brand growth? Defendants’ answer to these questions was repeatedly and unequivocally, “yes.”
Accordingly, investors were stunned when, in February 2019, Kraft Heinz announced an historic $15.4 billion write-down in the value of the Company’s Oscar Mayer and Kraft trademarks and other intangible assets. In the short time since the Merger took place, through undisclosed extreme and indiscriminate cost-cutting to the Company’s supply chain and brand investment, the Executive Defendants debased the value of the Company’s historic brands by as much as 50%. The Company then announced investigations by the SEC and Department of Justice into Kraft Heinz’s accounting and procurement practices, restated years of financial statements due to widespread misconduct in its procurement division, and fired Chief Executive Officer (“CEO”) Defendant Bernardo Hees, Chief Financial Officer David Knopf, and several other high-ranking Kraft Heinz executives.
Finally, at the end of the Class Period on August 8, 2019, the Company disclosed its results for the first half of 2019, which included significant sales and earnings misses. New CEO Miguel Patricio also made significant admissions about the Company’s culpability and hidden practices that led directly to the Company’s negative results. In total, from the first partial disclosure of the fraud until the end of the Class Period, Kraft Heinz’s stock price declined from $56.20 to $26.50, a drop of 53%. This drop caused a loss of approximately $36 billion in market capitalization.
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CONTACT:
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com