Robbins Arroyo LLP: Inventure Foods Inc. (SNAK) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Inventure Foods Inc. (NASDAQ: SNAK) in the Superior Court of the State of Arizona, County of Maricopa. The plaintiff brings the complaint on behalf of all purchasers of Inventure Foods stock in connection with the company’s secondary public offering (the “Offering”) conducted on or about September 17, 2014, for alleged violations of the Securities Exchange Act of 1933 by certain officers and directors. Inventure Foods markets and manufactures healthy/natural and indulgent special snack food brands in two segments – frozen products and snack products.
Inventure Foods Inc. Accused of Making False and Misleading Statements Regarding its Production Facilities
On September 11, 2014, Inventure Foods commenced its secondary public offering of 3,594,518 shares at $12.85 per share, to raise $53 million. In its prospectus, the company touted that it used regulatory compliant and effective food processing and packaging equipment housed in modern facilities, and that it had “state-of-the-art facilities.” According to the complaint, however, at the time of the Offering, the company’s Jefferson processing facility was in need of capital improvements and corrective actions to rectify unsanitary conditions that are known to breed dangerous bacteria and violated federal law.
The complaint alleges that the Department of Agriculture identified these unsafe conditions as early as April 2014, five months prior to the Offering. Then, on October 22, 2014, a few weeks following the Offering, the Department of Agriculture Food Safety Division inspected the Jefferson facility, identifying unsafe and unsanitary conditions that “may cause contamination of food being processed,” which the company allegedly failed to rectify for months prior to and since the secondary offering. According to the Drug and Food Administration (“FDA”), the conditions found at the Jefferson facility can breed Listeria.
On March 2, 2015, a complaint was filed with the FDA concerning the unsafe and unsanitary conditions at the Jefferson facility. Then, on April 23, 2015, the company recalled certain varieties of its frozen products due to the Jefferson facility testing positive for Listeria, which resulted in the destruction of 192,570 pounds of food and months of corrective action at the facility. On this news, Inventure Foods stock dropped 30% lower than the artificially inflated price the class members paid in the Offering. Further, the company’s frozen products segment gross profit decreased by 91.6% in fiscal year 2015 as compared to 2014, which the company admitted was a result of the recall.
Inventure Foods Inc. Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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