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
- An Update on the Firm's Mass Torts Litigation
- Eight Car Makers Join in the Recall of Exploding Airbags
- The Deepwater Horizon Claims Program is Up and Running Again
- Favorite Bible Verses
- J&J Pays Oregon $4 Million To Settle Hip Implant Marketing Claims
- MF Global Officers’ Defense Cost Already At $48 Million
- GSK Fined Record $489 Million For Bribery In China
- Bank Of America’s Mortgage Backed Securities Settlement Is The Most Consumer Friendly Deal Struck Thus Far
- Alabama Supreme Court Affirms Class-Action Status For $3.2 Billion Investor Lawsuit Against CVS Caremark
- U.S. Senate Confirms Jill Pryor To 11th Circuit
- Alabama Campaigns Move Slowly Towards November
- The National Scene Begins To Generate Interest
- United Kingdom’s Government Backs BP
- U.S. Chamber Sides With Foreign Oil Company Over Its Own Members
- Halliburton Reaches Settlement On Claims
- A Confirmation Of Judge Barbier’s Ruling That BP Was Grossly Negligent
- I bought my f350 from our local ford 2 years ago it had 140000 on it in the firs...
- I have worked for dollar general for 14 1/2 years. sept 29th me and my whole cre...
- I had the same ignition problem where the car would not turn off on my 2007 HHR ...
- my recall was just preformed and power steering has gone out. are these two issu...
- I would like to know if I have A case that your firm would take on. I had severe...
- If possible, I would love to join the class action law suit.
We own a 2004 F 35...
- I am wondering about this lawsuit. What the outcome is....
- You can find more information about Lipitor and its connection to Type 2 diabete...
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 - Oct 2, 2014 13:14 - 0 Comments
More In Product Liability
- NHTSA Looking Into Ford Fiesta Door Latch Problems
- NHTSA Looks At Chrysler Minivan Stalling Issue
- NHTSA Puts Blame on GM For Hiding Ignition Switch Defect
- Aurora Shooting Victims Sue Ammunition E-Retailers
- Children’s Clothing Should Never Be Fire Traps
Recalls Update - Oct 2, 2014 9:39 - 0 Comments
More In Recalls Update
- FDA Tells Compounder To Recall Contaminated Goods Again
- More Than 200,000 Pairs Of Children’s Sunglasses Recalled
- Cabrinha Recalls Kiteboarding Control System Due To Risk Of Injury
- iDevices Recalls Temperature Probes Due To Ingestion Hazard
- AmTRAN Video Recalls To Repair 42-Inch JVC Flat Panel Televisions