Robbins LLP: TreeHouse Foods, Inc. (THS) Misled Shareholders According to a Recently Filed Lawsuit
Robbins LLP announces that a lawsuit was filed against TreeHouse Foods, Inc. (NYSE: THS) in the Circuit Court of Cook County, Illinois—County Department, Chancery Division. The complaint is brought on behalf of TreeHouse Foods, Inc. and against certain current and former officers and directors of the company for breaches of fiduciary duties, unjust enrichment, and corporate waste. TreeHouse operates as a food and beverage manufacturer in the United States and Canada.
TreeHouse Accused of Misleading Investors About Its Acquisition Strategy
According to the complaint, on February 1, 2016, TreeHouse announced that it completed the acquisition of ConAgra Foods, Inc.’s private brands operations (“Private Brands”). TreeHouse elaborated, “We are pleased to have closed the acquisition, and will continue to focus on driving shareholder value and offering our customers value without compromise through economies of scale, quality products and superior customer service.” TreeHouse subsequently touted to investors the tremendous growth available for private label manufacturing in the United States and reported an optimistic outlook for 2016. However, the complaint alleges that TreeHouse officials failed to disclose that: (1) the company’s private label business was underperforming; (2) the company’s acquisition strategy was underperforming; and (3) that the company had overstated its full-year 2016 guidance.
On November 3, 2016, TreeHouse lowered its guidance for 2016 due to the underperformance of the Private Brands business and softness in the private label manufacturing business. The company elaborated, “Specifically, the shortfalls in Q3 earnings and Q4 outlook are principally attributable to a miscalculation on our behalf regarding the internal issues.” TreeHouse also announced the closure of a plant in Delta, British Columbia, and reported additional job cuts. In addition, the company announced the resignation of its newly-appointed President who had been President for only three months, and the appointment of a new Chief Financial Officer. On this news, the company’s shares fell $16.87 per share, or nearly 20%, to close at $69.72 per share on November 3, 2016.
TreeHouse 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.