Securities Litigation - Written by Beasley Allen on Monday, November 5, 2012 11:30 - 0 Comments
Sonoco Products Company, founded in 1899, is based in Hartsville, S.C. Sonoco is a global manufacturer of industrial and consumer packaging products and provider of packaging services. From 2001 – 2006, Sonoco enjoyed increasing prices across all customers in its flexible packaging division. In mid-2006, however, several of Sonoco’s largest customers put out bids on their flexible packaging business and Sonoco was ultimately required to dramatically lower its pricing to retain this business and one of its customers actually took its flexible packaging business elsewhere. As a result, both volume and profits derived from this division of Sonoco were significantly lower in 2007. While Sonoco issued several press releases touting price increases on certain of its markets and customers in late 2006 and early 2007, Sonoco issued no press release announcing price concessions or the loss of a major customer during the same period of time.
On February 7, 2007, Sonoco issued a press release announcing its financial results for the fourth quarter and year end of 2006 as well as its first quarter outlook for 2007. In the press release, Sonoco credited “higher selling prices” in the Consumer Packaging segment for its success and did not disclose to the market the loss of a major customer or significant price concessions. On April 20, 2007, Sonoco issued another press release announcing first quarter 2007 earnings and stated the company was “pleased to be able to recover much of the materials and other cost increases experienced during the quarter through higher selling prices.” As a result of this public statement, Sonoco’s stock price jumped to $43.04 per share, up $3.31 from the prior day’s close. On May 1, 2007, Sonoco filed its Form 10-Q with the SEC stating its quarterly report for the first quarter of 2007. The 10-Q filed by Sonoco failed to disclose the significant price concessions or the loss of a major customer by Sonoco, or the negative impact these events were having on Sonoco’s bottom line.
Finally, on July 20, 2007, Sonoco issued a press release with its second quarter earnings and, for the first time, revealed and disclosed “price reductions in certain flexible packaging without offsetting reductions in costs”. On this same date, Sonoco’s stock price declined 14.22% from $44.30 per share at close on July 19, 2007 to $38.00 at the close on July 20, 2007.
The City of Ann Arbor Employment Retirement System filed suit on June 26, 2008 seeking to represent all those persons or entities who had purchased or acquired Sonoco common stock during the class period. City of Ann Arbor asserted the failure by Sonoco and its executives to disclose or reveal the price concessions and loss of a major customer in its flexible packaging division was a material omission or concealment in violation of the federal securities laws. Sonoco and its executives denied the allegation and asserted the price concessions and loss of a major customer were not material to the overall companywide financial performance and projections and therefore had no duty to disclose them. The company also claimed that because it met its earnings guidance or projection during the time period in question it should not be liable for securities fraud.
On September 30, 2010, Judge Terry L. Wooten of the USDC for the District of South Carolina certified a class of all those persons or entities who purchased or otherwise acquired Sonoco common stock between February 7, 2007 and September 18, 2007. On September 22, 2011, Judge Wooten denied Sonoco’s motion for summary judgment as well as the party’s respective motions to exclude expert witness opinions and testimony. With the case ready to proceed to trial, the parties reached a settlement agreement in the amount of $13 million at mediation in April 2012. At a hearing on September 4th, Judge Wooten approved the settlement agreement and awarded Plaintiffs’ counsel $4 million in attorney’s fees. Jack Reise and Mike Greenwald of Robbins, Geller, Rudman & Dowd were Lead Counsel for the Plaintiff. Bill Hopkins from our firm served as Liaison Counsel for the Plaintiff. They did a very good job in this case.
If you, or someone you know, has been deceived and bought stock based upon a material misrepresentation or concealment of material facts relating to a company, contact Bill Hopkins, who is our firm’s Consumer Fraud Section, at 800-898-2034 or by email at Bill.Hopkins@beasleyallen.com.
Leave a Reply
- Testosterone Multidistrict Litigation Has Been Formed
- Favorite Bible Verses
- Exploding Airbags is the Next Hidden Danger Lurking on the Horizon
- An Update on the Firm's Mass Torts Litigation
- The Travis Grant Story Is A Good One
- The Civil Justice System Does Make a Difference
- BP's Stay Request Fails Before the Supreme Court
- Favorite Bible Verses
- Eight Car Makers Join in the Recall of Exploding Airbags
- The Deepwater Horizon Claims Program is Up and Running Again
- Favorite Bible Verses
- Pollution Plagues The Water In Alabama
- New York Appeals Court Decisions May Impact Fracking Nationwide
- The Prices Of Generic Drugs Are Going Up
- John Hopkins Settles Pelvic Exam Lawsuits For $190 Million
- An Update On Boating Accidents
- There Were 10 Deaths And 123 Injured During 4th Of July Travel Period In Alabama
- Tracy Morgan Files Suit Against Wal-Mart
- OSHA Issues Safety Violations To Bridge Company
- Investigators Say Overloaded Storage Bins Caused Building Collapse
- Jury Returns $15 Million Verdict Against The Los Angeles Dodgers
- Safeguards Needed To Protect The Public Against Predatory Lenders
- I was an employee since 2002. I was fired on July31, 2014. I knew for almost 2 y...
- It would of been nice to got a letter!!!! For my 2012 tri-glide, mine just start...
- My 2007 F150 Triton 4x4 truck has had two regulators replaced on the driver door...
- Just in case Ford ever steps up, I'm chiming in. Original Owner 2004 F150 SCrew...
- August 26, 2014 - my wife has received an August GM recall notice on her 2002 mo...
- Thanks, Tiffany Lindsay keep me posted...
- To the lawyer of this firm, something similar happen to me today while traveling...
- Ford sucks! for not recalling this issue... I am on my second replacement.
Recent Settlements - Feb 9, 2012 7:09 - 0 Comments
More In Recent Settlements
- A Further Update On The AWP Litigation
- Firm Reaches Settlement In Fort McClellan Radio Tower Collapse Case
- Firm Reaches Settlement In Sikorsky Helicopter Crash
- The Philadelphia Story
- St. Croix, Virgin Islands Settlement
Product Liability - Aug 1, 2014 14:22 - 0 Comments
More In Product Liability
- NHTSA Finally Issues A Rear Underride Standard
- Dangers Associated With Portable Bed Handles
- A Danger in Your Home Is Hiding In Plain Sight
- Joan Claybrook Recalls Important Product Safety Issues She Dealt With As Head Of NHTSA
- GM Stops Sales Of Some Cadillacs Over Ignition Issue
Recalls Update - Aug 1, 2014 12:23 - 0 Comments
More In Recalls Update
- Unique Pharmaceuticals, Ltd. Recalls All Sterile Compounded Preparations Within Their Expire Period
- Dream On Me Recalls High Chairs Due To Strangulation And Fall Hazards
- Oeuf Recalls To Repair Cribs Due To Entrapment Hazard
- Fiberglass Boom May Conduct Electricity
- Porter-Cable Fixed-Base Production Routers Recalled Due To Electrical Shock Hazard