According to a law firm press release, an institutional investor filed a class action lawsuit against Sonoco Products and certain of its officers and directors charging violations of the Securities Exchange Act of 1934. Sonoco Products manufactures industrial and consumer packaging products, and packaging services primarily in the United States, Europe, and Canada.
The complaint alleges that, during the Class Period, defendants issued a series of materially false and misleading statements concerning the Company's financial performance and prospects. Specifically, the complaint alleges that these statements were materially false and misleading because defendants failed to disclose and/or misrepresented: (i) that the Company was losing market share to
its competitors; (ii) that the Company was having operational difficulties in implementing its next generation of products; (iii) that the Company was experiencing weaker sales in its Engineered Carriers and Paper and Consumer Packaging segments, especially in North America; (iv) that the Company was distracted by the loss of a bid on a large contract, which resulted in decreased sales and price concessions on current contracts; (v) that the Company was having a
difficult time in moving its old inventory; and (vi) that as a result of the forgoing, the Company had no reasonable basis for its 2007 earnings guidance.
On July 20, 2007, the Company announced its financial results for the second quarter of 2007, the period ended July 1, 2007. For the quarter, the Company reported earnings of $0.41 per diluted share, below analysts' expectations. In response to this announcement, shares of the Company's common stock fell $6.30 per share, or over 14%, to close at $38.00 per share, on heavy trading volume.
On September 18, 2007, the Company announced that it was reducing its third quarter 2007 base earnings estimate to a range of $0.55 to $0.58 per diluted share. Upon this news, shares of the Company's stock fell $2.42 per share, or over 7%, to close at $30.78 per share, on heavy trading volume.
On July 28, 2008, the defendants filed a motion to dismiss the complaint. On October 14, 2008, the plaintiffs filed an Amended Class Action Complaint. On October 31, 2008, the Court entered the Consent Order signed by the Honorable Terry L. Wooten withdrawing the motion to dismiss and granting the motion to appoint the lead plaintiff and lead counsel. The City of Ann Arbor Employees' Retirement System was appointed lead plaintiff and the law firm of Coughlin, Stoia, Geller Rudman & Robbins was approved as lead counsel. On November 5, 2008, the defendants filed a motion to dismiss the Amended Class Action Complaint. Judge Wooten denied that motion on August 14, 2009. The defendants filed a motion for reconsideration, which was also denied. On November 16, 2009, the plaintiff filed a motion to certify the class.
On October 19, 2011, the Court issued an Order denying the Defendant's Motion for Summary Judgment.
On April 26, 2012, a Stipulation of Settlement was struck between the parties that set forth the terms of the agreement. On May 1, 2012, the Court approved the settlement.
On September 7, 2012, an Order Awarding Attorneys’ Fees and Expenses; and the subsequent Final Judgment and Order of Dismissal with Prejudice were issued by the Court.