Robbins LLP: Calavo Growers, Inc. (CVGW) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of Calavo Growers, Inc. (NASDAQGS: CVGW) has filed a federal securities fraud class action complaint in the U.S. District Court for the Central District of California. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between March 5, 2012 and January 14, 2015. Calavo markets and distributes avocados, prepared avocados, and other perishable foods worldwide.
Calavo Is Accused of Misleading Investors
Shares of Calavo dropped $4.72 per share, or over 9%, to close at $43.07 per share on January 15, 2015, following the company’s announcement that it had identified a non-cash misstatement in its historical consolidated financial statements. Specifically, in the period following Calavo’s acquisition of RFG in June 2011, the company was required to make the maximum earn-out payments pursuant to the acquisition agreement. When recording this contingent consideration, which was paid in common stock, Calavo recorded it incorrectly as an equity instrument, failing to record expense based on the changes in fair value. Due to this error, Calavo will record a non-cash charge totaling, over all of the affected periods, $88.9 million.
The complaint alleges that Calavo made false and/or misleading statements and/or failed to disclose that it: (i) failed to maintain an accurately valued contingent consideration pursuant to the acquisition of RFG; (ii) overstated its non-cash operating expenses; and (iii) lacked adequate internal controls over financial reporting as a result of the foregoing, the company’s financial statements were materially false and misleading.
Calavo 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.