According to a press release date September 1, 2011, the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company was experiencing a known but undisclosed reduction in customer demand for its products resulting from Mexican and other sugar refiners selling sugar products into the Company’s markets at steeply discounted prices; (b) that the decline in the Company’s sales volumes during the Class Period was primarily due to a lack of customer demand ensuing from forays by competitors selling lower-priced products into the Company’s markets and not due to Company refinery production supply constraints; (c) that, as a result of the foregoing, the Company was experiencing a significant decline in its gross margins, particularly in the second half of the Class Period; (d) that the Company’s Port Wentworth, Georgia refinery was experiencing ongoing operating defects that resulted in higher production costs and adversely impacted the Company’s gross margins; (e) that defendants’ representations about the Company’s disclosure controls were materially false and misleading; and (f) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its business prospects during the Class Period.
On August 5, 2011, the Company announced its operating results for the quarter ended June 30, 2011. That same day, ISC filed with the United States Securities and Exchange Commission its Form 10-Q for the quarter ended June 30, 2011, which revealed that the Company’s industrial sales volumes had declined by more than 40% from the same prior year period.
Following the Company’s 2011 fiscal third quarter earnings announcement, defendants held a conference call with securities analysts for investors wherein it was revealed that: (i) the Company’s 2011 industrial orders, and hence, its industrial sales volumes, were booked and therefore known to defendants well in advance of 2011; (ii) the Company had filled all of its existing orders during the June 2011 quarter, including its industrial orders; (iii) production at the Company’s refineries did not limit its sales volumes; (iv) the Company’s Port Wentworth, Georgia refinery had experienced ongoing operating defects, resulting in higher production costs that adversely impacted the Company’s gross margins; and (v) competitive pricing by low cost Mexican and other sugar refiners had a material adverse effect on the Company’s sales and gross margins.
In response to these revelations, shares of the Company’s common stock plummeted nearly 60%, from $23.19 per share on August 4, 2011 to $9.44 on August 5, 2011.
On October 28, 2011, the Court issued an Order consolidating Lead Case No. 4:11cv3250 and Member Case No. 4:11cv3457.
On January 31, 2012, the Court issued an Order granting Plaintiff Amir Hassan's Motion to Dismiss Claims.
On February 1, 2012, the Court issued an Order appointing lead plaintiff and approving lead counsel.
On March 22, 2012, plaintiffs filed an amended and consolidated class action complaint.
According to a minute entry, on October 9, 2012, the Court heard arguments on defendant Imperial Sugar Company's motion to dismiss the amended complaint under Rule 12(b)(6), and plaintiff Carpenters Pension Funds motion to strike extraneous documents and references thereto in the defendants motion to dismiss the consolidated class action complaint. The court ordered as follows: plaintiff Carpenters Pension Funds motion to strike is denied with respect to Exhibits D, E, L, and Q; and is denied with respect to the figures contained in the Sugar Production & Sales Chart. The court also denied Carpenters Pension Funds alternative request to convert the defendants 12(b)(6) motion to a summary judgment motion and permit Carpenters to begin the discovery process. The court reserved judgment on Imperial Sugar Company's motion to dismis, and on Carpenters Pension Funds motion to strike Exhibit M.
On September 27, 2013, the Court issued an Order granting the defendants' motion to dismiss. Plaintiffs were given leave to file an amended complaint. Plaintiffs decided not to file an amended complaint, and thus the Court entered Final Judgment on November 21st.