Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against MGP Ingredients, Inc.
SAN DIEGO--(BUSINESS WIRE)--Feb 28, 2020--
Robbins Geller Rudman & Dowd LLP ( https://www.rgrdlaw.com/cases-mgp-class-action-lawsuit.html ) today announced that it filed a class action seeking to represent purchasers of MGP Ingredients, Inc. (NASDAQ:MGPI) common stock during the period between February 27, 2019 and February 25, 2020 (the “Class Period”). This action was filed in the District of Kansas and is captioned Corbezzolo v. MGP Ingredients, Inc., et al., No. 20-cv-02090.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased MGP common stock during the Class Period to seek appointment as lead plaintiff in the MGP class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the MGP class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the MGP class action lawsuit. An investor’s ability to share in any potential future recovery of the MGP class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the MGP class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the MGP class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-mgp-class-action-lawsuit.html.
The MGP class action lawsuit charges MGP and certain of its officers with violations of the Securities Exchange Act of 1934. MGP is a producer and supplier of premium distilled spirits and specialty wheat protein and starch food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits, including vodka and gin. MGP is also a top producer of high quality industrial alcohol for use in both food and non-food applications.
Beginning in 2015, instead of selling its whiskey as an unaged new distillate, which was then barreled and aged by its customers, MGP started storing significant amounts of barreled distillate that it could later sell as aged whiskey. After four years of aging, the Company was expected to commence selling this aged whiskey in 2019 at three times the price of unaged whiskey.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information concerning MGP’s business and financial condition. Specifically, defendants failed to disclose that MGP had not completed any significant sales of its aged whiskey inventory, the Company had been unable to sell its aged whiskey at the price premium represented to investors, a glut of aged whiskey inventory and shifts in consumer behavior had lowered the value of the Company’s aged whiskey inventory and materially impaired its ability to negotiate significant sales on favorable contract terms, and as a consequence, defendants’ full-year 2019 financial guidance lacked a reasonable basis and was materially misleading. As a result of this information being withheld from the market, the price of MGP common stock was artificially inflated to a high of more than $88 per share during the Class Period.
On May 1, 2019, defendants announced MGP’s first quarter 2019 financial results, including “lighter” than consensus results due to “lower volumes” in sales of aged whiskey, but claimed that MGP was experiencing favorable demand and pricing trends and “confidently confirm[ed]” the Company’s guidance for the remainder of the year. On this news, the price of MGP stock declined nearly 23%. On July 31, 2019, defendants announced weak second quarter 2019 financial results, again due to poor sales of aged whiskey. In addition, defendants affirmed MGP’s net sales growth guidance, but revised downward their guidance for operating income growth. On this news, the price of MGP stock declined more than 25%. On October 31, 2019, defendants announced disappointing third quarter 2019 financial results, again due to poor whiskey sales, and blamed the failure to transact aged whiskey sales on customer delays and “funding issues,” but reiterated that MGP remained on track to achieve its revised full-year 2019 guidance. Following these disclosures, the Company’s stock price declined nearly 12%.
On January 17, 2020, the Company announced its preliminary full-year 2019 financial results, which significantly missed the guidance defendants had reiterated with just two months to go in the year. Following these disclosures, the price of MGP stock declined more than 27% to close at $38.18 per share on January 17, 2020. Then, on February 26, 2020, the Company announced its finalized full-year 2019 financial results, confirming its previously announced preliminary results, including that it had fallen “significantly short of . . . guidance” due to its failure to sell aged whiskey during the fourth quarter of 2019. The Company also revealed that aged whiskey sales had declined year over year and that it had failed to secure the contracts it had previously highlighted to investors. On this news, the price of MGP stock declined 11% to close at $28.42 per share on February 26, 2020, which represented a 67% price decline from the stock’s Class Period high of $88.06 per share.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six 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 the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.
View source version on businesswire.com:https://www.businesswire.com/news/home/20200228005569/en/
CONTACT: Robbins Geller Rudman & Dowd LLP
Brian E. Cochran, 800-449-4900
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA KANSAS
INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES
SOURCE: Robbins Geller Rudman & Dowd LLP
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PUB: 02/28/2020 05:30 PM/DISC: 02/28/2020 05:30 PM